Qinghai`s Economic Development Strategy

Abstract

There is considerable optimism in Qinghai concerning future economic development as this western province expects more funding from the central government in support of the grand strategy to develop western China. Since economic development and industrial expansion in Qinghai have been heavily dependent on project funding from the central government, heavy industries have been given priority. In terms of the generation of employment opportunities, however heavy industries’ contribution has been much more limited. The slow growth of light industries reflects a general lack of entrepreneurship in the province, and the shortage of employment opportunities in the urban areas has reduced the attraction of education as a channel of upward social mobility. The predominance of the state sector partly explains the lack of entrepreneurship. The reform of state-owned enterprises does not seem to inspire much confidence. Issues of efficiency and profitability tend to be accorded lower priority, as the major objective is to maximize funding from the central government. Moreover, these problems have been exacerbated by the short supply of senior managers and technical personnel. More encouraging has been the development in recent years of the road and railway networks. The provincial authorities must now make greater efforts to attract investment from the coastal provinces. The inflow of investment will help to retain talent, increase urban employment, and make individual investment in education more attractive.