[Reprint] If China has so much money to invest in other countries, why don't they develop the poor parts of China?

If China has so much money to invest in other countries, why don’t they develop the poor parts of China?

Which poor part of China do you refer to? Can you give just one specific example that China has failed or ignored to develop?

If you are not convinced, let us just look at the situations from the poorest part of China. Here are the last four provinces with the least GDP per capita (nominal) in China: List of Chinese administrative divisions by GDP per capita - Wikipedia:

  1. Gansu province ($4735, 26 million people)
  2. Yunnan province ($5612, 48 million people)
  3. Guizhou province ($6233, 36 million people)
  4. Guangxi province ($6270, 49 million people)

Just for reference: India ($2036), Vietnam ($2551), Mongolia ($4026), Albania ($5289), South Africa ($6377). Note that all the listed are poorer than Tibet ($6550, 3m people) and Xinjiang ($7476, 24m) in term of GDP per capita.

We will look at these provinces and see what China has done specifically to develop these poor provinces.

This will be an extremely long post. Please read at your discretion. But if you read on, I’m sure you will learn a lot of new things about China:

1. Gansu province

Gansu is poor for a reason. On one side, you have the massive freezing Tibetan Plateau. On the other side, you have the deadly Gobi Desert.

God doesn’t want you to live here. But you insisted.

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Image credit: 地球知识局

What kind of environment are we talking about? Have a look at the following picture. This is what a typical village in Gansu looks like.

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Red stones, golden sands and deep valleys. Gansu is the Nevada State of China. There are a lot of sites just like the death valley and red canyon in the USA.

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The Taolai River Gorge at Jiayuguan Pass in Gansu

Imagine you are living here. You grow your food in the valleys but you have virtually no rainfall at all. Even if you managed to grow a few tons of wheat magically, where you do sell? To the nearest city? That’s fine. Please drive 5 hours out of this god damn dry mountains.

Even if you manage to find a customer to buy your wheat. He will buy your wheat for $150 per ton. But your transport and fuel cost to move the wheat out of these mountains has exceeded $100 per ton. Considering other costs, okay … , so do you grow wheat just for losing money?

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A mountain road in Jingtai County, Gansu

So you have no choice but to leave the village and become a Foxconn worker in Zhengzhou and spent your days making iPhones. That’s what most Gansu people would choose to do. As most people are leaving the rugged land to the cities, your village becomes deserted just like this:

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An abandoned village in Dingxi County, Gansu

What has the Chinese government done to address this problem?

For the 13th Five Year Plan (2016–2020), the central government has poured a huge amount of money in building expressways and railways across these God damn hills. And what’s more, they are not building “Level 5” bridges just enough for people to move. Instead, they are building “Level 50” shiny and massive bridges.

What are the differences between a “Level 5” bridge and “Level 50” bridge?

Here is an example of a “Level 5” bridge in France. Short in length and height. You have to rush down, cross the bridge and climb up the mountains.

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Here is an example of a “Level 50” bridge in Gansu. All you need to do is to pass through at the speed of 120km/h.

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Tian Ning Gou Bridge in Gansu, Tianyong expressway

These “level 50” bridges are indeed very expensive to build. But, on the other hand, they are very cost effective if you consider the amount of fuel saved for trucks, trains, and cars! You don’t have to go down and up again and again.

Even if there is already a “level 5” road along the valleys, the government is still not satisfied. They want to build another high-speed “level 50” expressway along with it. In order to run at 120km/h across the mountains and valleys, the expressway has to be filled with tunnels and bridges so that it is more stretched. This makes trucks and cars to drive faster with less distance. So the fuel cost and transport costs can be reduced significantly.

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Provincial expressways S2 in construction in Gansu (35°21’14.3”N 102°49’02.0”E)

In 2019, the total “Level 50” expressway length in Gansu has exceeded 4242km [1] (speed limit 120km/h), which is even longer than Mexico. And it is almost three times longer than India’s total length. Not only expressways but Gansu also has 4 lines of high-speed railways running at 250km/h to 350km/h (宝兰,成兰,兰新,兰渝).

In the next 14th Five Year Plan (2021–2025), the government will promise to connect every prefecture city of Gansu with high-speed railways and expressways.

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Lanzhou-Xinjiang high-speed railways

Why are “Level 50” bridges, roads and railways are so useful?

Imagine you are the farmer mentioned above, thanks to the village road built around you, you can transport your crops to your nearest city faster and also at a lower cost. The distributor in your nearest city can also find customers in a province that is even further away. People who are at 2000km away can buy your wheat at a higher price, thanks to the giant expressway network. Overall, you can finally make profits in growing wheat in Gansu!

Still think what I said is made-up or propaganda?

Well, here is another real-life example. Imagine you live in a distant village in Gansu and you want to buy a mobile phone from Taobao (Chinese Amazon), what does it cost to ship a package of 1kg from Shenzhen to Dunhuang in Gansu in 2019? Note that the total distance is around 3500km.

You can use this Chinese website for shipping cost calculation: 快递价格和网点查询 - 快递小帮手

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According to the website, the total cost for shipping over the 3500km is 15RMB ($2.2) and it promises to arrive in 3 days.

For comparison, the total cost for shipping one 1kg package from Boston to Reno in Nevada (a similar 4000km) in the USA is $26.13 according to the UPS shipping price calculator under the UPS 3-day service.

Therefore in the USA, it requires 10x more money to do the same thing! And note that they are both counted in the GDP calculation in both countries. Is it fair? Of course not. This applies to other services too.

That means Gansu is not that “poor” as we originally thought.

Instead, Gansu is also blessed with the richness in “green” natural resources. On one side, you have the freezing Tibetan plateau. On the other side, you have the hot Gobi desert. Boom! The temperature difference causes constant wind blowing. God doesn’t want you to live here but he really gives you another gift: the wind power.

Therefore, Gansu is the leader in its renewable energy sector. It has the world’s largest on-shore wind farm:

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Gansu Jiuquan Windfarm 40°40'31.2"N 95°24'44.5"E

There are so many on-shore solar farms in Gansu as well. I am not sure if it is the world’s largest. But you can spot them everywhere on Google Earth.

If you can’t grow crops on the land, then just grow solar panels.

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Gansu Wuwei Solarfarm 38°06'05.1"N 102°18'00.2"E
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God also said, “Let Gansu be light”. Thanks to the Chinese, do you see the holy light?

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Gansu Dunhuang Tower Solarfarm 40°03'49.3"N 94°25'29.9"E

However, despite China’s “great leap forward” in solar farm construction, they are faced with severe problems in Gansu. They are generating too much electricity and it is much more than the Gansu people can consume. The private sector is also investing heavily in Gansu, making the government unable to control the overall supply of the solar power in Gansu.

As a result, it is estimated 40% of the wind and solar electricity is wasted in Gansu [2]. We could not store the energy because currently, we don’t have giant batteries. Storing a huge amount of energy remains a problem to be solved by future technology.

The remaining choice is to transmit this huge amount of electricity through the ultra-high voltage power grid to the power-hungry Eastern China. However, building a 3000km power grid is not an easy task and people along the grid would complain about the danger and radiation above their houses. I will write about this on-going Chinese mega project and its achievements and problems in another answer.

In summary, these conclude the development in the poorest province of China —Gansu. The GDP growth for Gansu province in 2018 is 10.54% [3]. And it is still far from enough compared to other provinces because we still have a lot of distant villages in Gansu that are yet covered by decent roads and bridges. We will wait and see how China continues to eliminate poverty here.

2. Yunnan & Guizhou province

The next three poorest provinces: Yunnan, Guizhou, and Guangxi are next to each other in the Southwest of China. There are around 140 million people living here.

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Image Credit: 地球知识局

Yunnan & Guizhou are poor for the same reason. So let’s look at them together and later we discuss Guangxi specifically.

If you have already been there, you might have already enjoyed those amazing tourist attractions in these areas. But they do not represent the majority of the people nor the whole poverty situation.

What is the real situation?

As the Indian subcontinent continues to squeeze, terrains around here are becoming more and more similar to “wrinkles”, as mountains are squeezed higher and the rivers continue to carve valleys deeper.

Yes, it is like the wrinkles of the skin.

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Imagine you are living in the middle of the “wrinkle”. You would be surrounded by tall mountains and deep valleys.

It is nearly impossible to move around without flying. Building roads is also nearly impossible. You would be isolated for your whole life. To get a taste of what it is like, you can just go to Google Earth and experience it. (26°12’28.4”N 99°07’57.1”E)

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Even if you can climb across the mountains to the other side, you have to climb up and down another three similar mountains in order to reach a nearby city.

As a farmer, can you get rich if you live here? That’s nearly impossible. If you are ill, you have to call a helicopter to fly to the nearest hospital. But you have to be rich to afford a mobile phone. No signals? Oh, why not just wait and die?

Are you desperate? Most likely.

But the Chinese said: “Hold my beer, I got this”.

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Beipanjiang bridge, Liupanshui, Guizhou (World’s highest bridge)
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Pu-Li-Te Bridge, Xuanwei, Yunnan (World’s third highest bridge)
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Jin-An Bridge, Lijiang, Yunnan (World’s fourth highest bridge, to be completed in 2020)
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Ya-Chi-He Bridge, Qingzhen, Guizhou (World’s fifth highest bridge)
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Liu-Guang-He Bridge, Liutong, Guizhou (World’s sixth highest bridge)
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Ping-tang Bridge, Liutong, Guizhou (World’s largest viaduct bridge, to be completed later in 2019)

A similar and smaller viaduct bridge can be found in Hunan as well. Here is the video for the beer:

The Chinese said: “Hold up. There are ten more to come in the next five years”.

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A high-speed railway arch bridge in Guizhou. Bullet trains pass through this bridge at the speed of 250km/h.

For comparison, a similar railway bridge is also being built in India. It is the Chenab Railway Bridge in J&K. Chenab Bridge - Wikipedia However, this bridge started in 2003 and it was originally intended to be completed in December 2009. But ten years passed the Indian people have still not finished it.

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If the Indian engineers wanted to delay for another 2 years, the bridge would no longer be the world’s tallest railway arch bridge. The new King will be crown to the Sichuan-Tibet railway bridge.

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That’s enough for bridges. For the rest of the bridges please refer to List of highest bridges - Wikipedia. Basically nearly the world’s top 100 highest bridges are all from Yunan and Guizhou (I’m not talking about China. Just the two provinces).

And we are not comparing the length of the bridge, because expressways in Yunnan and Guizhou are pretty much always in bridges or tunnels. So it is pointless to compare their length.

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The takeaway for this section is that please don’t take for granted if you see the expressway network like this in Yunnan and Guizhou.

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Think about their terrain and imagine how difficult it is to build expressways here.

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Now back to Yunnan and Guizhou. What kind of other developments that are worth mentioning?

4G Network Coverage

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Even in the most distant village with no good roads, you can always find 4G base stations installed. In terms of 4G, no other countries in the world can be compared with China. Not a single developed country like the USA, UK nor Japan can be comparable in such a scale.

According to the Ministry of Industry and IT in China [7], there are 1.204 billion users connected to 4G stations in China. There are 3.72 million 4G base stations installed in China, exceeding 20% more than the rest of the world combined. Guizhou has achieved 100% 4G coverage in all its 10k villages and Yunnan reaches 65% in its progress.

In 2019, the package price for unlimited 4G internet is 98rmb ($14.5) for one person and 134 rmb ($20) for a family of three. Compared to the USA, you have to spend $40 in T-Mobile just to have a 10GB of internet. Compared to India, although India has much cheaper Internet than China, their 4G coverage is relatively low compared to China.

Why does the 4G access useful? Well, this is another answer I will write. But just to draw your curiosity, do you notice that there are more and more Youtubers from Yunnan and Guizhou broadcasting their daily farming life?

Making Toufu online?

Picking tea leaves online?

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Hydroelectricity

Of course, 4G signals are inseparable from the electricity. Yunnan and Guizhou are also blessed with the hydropower. Most of the worlds’ largest dams and power stations listed here are from Yunnan and Guizhou. List of largest hydroelectric power stations - Wikipedia. They contribute to 30% of the hydroelectricity generated in China.

  • Yunnan hydropower generation: 280.4 terawatt hours [4]
  • Guizhou hydropower generation: 65.8 terawatt hours [5]
  • Three Gorges Dam (only) generation: 88.2 terawatt hours [6]
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Just follow along the four major rivers in Yunnan from Google Earth. You can find many stages of Dam on the same river. For example, the Jinsha River (Yangtze) has nine stages of dams.

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A dam along the Jin Sha River 26°48'23.9"N 100°26'46.4"E

Compared to the power transmission and storage problem in Gansu, hydroelectricity generated in Yunan and Guizhou are directly transmitted to power up the Guangdong province and Hong Kong, because China has already built the ultra-high voltage power transmission line.

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That means a fraction of your made-in-China products are actually manufactured using the hydro-power from Yunnan.

Data centres

Thanks to the abundance of electricity and water resources for cooling, the Chinese government has chosen Guizhou as its most important base for data centres.

Deep in the caves of Guizhou, lies the Tencent T-Block data centre (腾讯七星数据中心). This is the place where the data of all Chinese Wechat/Tencent Video (Chinese Netflix) users are stored.

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In 2018, Apple has also decided to place its iCloud (China) data centre in Guizhou. This is where all Chinese apple users information are stored in China.

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Now pretty much every important IT company has set their data centres in Guizhou, such as Alibaba, Huawei, China Mobile, etc.

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Why do most companies choose Guizhou, such a poor place, to be the destination for data centres? Why not other places?

Because Xi Jinping wants it. He recommends IT companies to place their data centres in Guizhou to enjoy cuts in taxes and electricity bills. As Guizhou have more data centres, it finally has something to focus for its own to develop.

Why does Xi Jinping think Guizhou is so special?

Because Xi found that the leader of Guizhou, Chen Min’er, was exceptionally capable. It was Chen who led Guizhou to attract so many investments and called for IT companies to setup big data centre installations in Guizhou. Thanks to Chen’s excellent governing skill in Guizhou, he is now promoted to the Mayor of Chongqing.

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I think he will be the next president of China after Xi Jinping (if he continues to demonstrate his governance skills).

On the other hand, China can finally build its Great Data Bank of China in Guizhou so that the Chinese government can regulate API usage based on Chinese laws and validation using Chinese government licensed blockchain E-authentication.

Yes, this is really the authoritarian style of development in the Internet area. New forms of democracy are created: the government can instantly sample on what do the citizen feel from their mobile phones (like instant vote).

3. Guangxi province

Guangxi and Northen Vietnam are actually very similar in terms of geographic positions and terrains. They both have plenty of flooded plains, hilly mountains and coastal areas. Their cultures are actually very similar. Both are the descendants of the Nanyue Kingdom.

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In theory, their GDP per capita should be similar but Vietnam suffers many wars compared to Guangxi. Now Guangxi GDP per capita is $6270 and Vietnam is $2557.

Compared to Northern Vietnam, the main problem for Guangxi is that all of its tributary rivers are flowing east instead of heading the south to the sea. These tributary rivers are then forming into one giant Pearl River at Wuzhou and then reaches the South China Sea in Canton.

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Even for today in China, there are still a lot of heavyweight goods shipped through the rivers because of its cheap costs. This becomes really a problem for Guangxi. Since all its rivers flow directly to the east, all river-based shipment from Guangxi has to go through Guangzhou and Hong Kong.

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From the above picture, the biggest embarrassment for its Capital Nanning is that ships have to travel 1000km to the east to reach the sea, even though Nanning is only 100km away from the coast in the south. Just imagine the extra cost added for the Guangxi people for international shipment!

A similar terrain can be found in Brazil. A huge mountain can be seen blocking the coast. This is really a curse from God. That’s why the Brazilian economy is not so good and could not develop manufacturing.

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Guangxi is slightly better but shipping costs in Guangxi are more expensive compared to other coastal provinces in China. Due to the high costs, investments and talents would not come and it suffers the severe brain drain from the nearby Canton. This is the ultimate reason why Guangxi is poor.

On the contrary, if you look at Northern Vietnam, they are blessed with a wide natural river — the Red River. 5000-ton ships can easily reach Hanoi from Hai Phong. Low-cost transportation gives Vietnam the destiny to be the next center of low-end manufacturing. With the current US-China trade war, Vietnam would receive more foreign investments and its economy would be sky-rocketing.

Hopefully, if the Vietnamese government could follow the same approach as the Chinese government and massively expand its infrastructure and energy sectors, Hanoi-Hai Phong (the red river delta) would become the next mega metropolis around this region and they may experience over 10% growth over the next three decades.

Therefore Guangxi people have to be aware that Vietnam people are catching up quickly. What they need to do is to try everything best to improve its infrastructure and attract shipment from Chongqing and Kunming.

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For the above map, you can see that it is actually closer for Kunming to go through Vietnam to reach the sea. If the Vietnam government is really clever, they should reduce the shipping costs (by improving road quality) and attract goods from Kunming and Tibet and use Hanoi port. This would make Hanoi to become the next logistic center for international shipping.

That’s why it is vital for the Guangxi government to counterbalance Vietnam and promote its connections to Yunan and Chongqing.

However, in the past two decades, the Guangxi CCP government have gone in the wrong direction. They’ve built three giant international ports along the coast. But not many people and ships wanted to use them. The combined port shipment volume is only 200million tons, which ranked at 18th among all ports in China.

Originally for Kunming and Chongqing, it is always cheaper and easier to go through Guangzhou instead of coming here. And what’s worse. You made all your three ports (Fang-cheng-gang, Qinzhou, Beihai) compete with each other, instead of focusing on building a combined giant port.

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Image: A massive expansion in Fangchenggang port. Now it is pretty much a “ghost port”. 21°33'59.4"N 108°22'37.0"E

And what’s worse. The top CCP leader in Guangxi focused on building expressway and railway connections to Guangdong and ignored the roads to Kunming and Chongqing. As a result, more Guangxi people are drawn by the gravity from Guangdong and they are not coming back. This causes a severe brain drain in Guangxi.

People are leaving and ships are not coming. That’s why the Guangxi CCP leader did not get promoted. However, Guangxi is not a province, but it is an autonomous region in China. So it has its own laws and regulations. One of its regulation is that the Guangxi leader must be a Zhuang entity Zhuang people - Wikipedia. This race-based selection obviously breaks the meritocracy system of CCP. And I think this is probably the reason why Guangxi is not developed so well. That’s why I suggest to remove the “autonomous” status and make Guangxi a province.

Lucky the current CCP leader in Guangxi has realized the problem and focus on promoting connections between Yunnan and Guizhou. And also they proposed to Build Canals!

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For the 13th Five Year Plan in Guangxi, the CCP is planning to “evaluate” the possibility of the Ping-Lu Canal (平陆运河) that connects the Pingtang river to the Qinjiang river in the south.

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The canal is 20km long and it is very expensive to build. For reference, it is half the length of the Kra Canal in Thailand. It requires a lot of in-depth studies before the CCP finally decides to spend billions of RMB to build the canal. Whether it is worthwhile, it remains to be seen.

If it were built, it would be truly a significant boost to the Guangxi economy. With connected water, ships can then carry extra-heavy machinery and goods across most of the river network in Guangxi. It would finally solve the Guangxi problem!

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For the road and railway network, Guangxi still has a lot of rooms to improve in terms of density and accessibility. I’m not listing their detailed projects because they are similar to Yunan and Guizhou.

Conclusion

After this extremely long post, I hope you can know something about the on-going developments in the four poorest provinces of China. The take away is that China invests much more domestically than abroad. These are all in the news but people just don’t pay attention to them.

And also note that most of the above projects are led by Chinese state enterprises. They lose money for doing this. But they bring huge social benefits to the general people. This is called “socialism with Chinese characteristics” and it is working. That’s why the West such as the USA and Europe could not achieve nor even consider doing it.

Finally, let’s finish up with a view of the expressway in Guangxi province. Thank you for taking the time to read this extremely long posts.

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Please enjoy the real China :)

Author: Janus Dongye Qimeng


Remarks:

Written on September 16, 2019