Just months after releasing the Greater Bay Area plan for southern China, Beijing has rolled out another ambitious development plan for the country’s top economic powerhouse – the Yangtze River Delta.
The blueprint is widely seen as another push by Beijing to drive growth through regional blocs, using them to see the country through unprecedented challenges from slowing growth and the relentless trade war with the United States.

The Yangtze plan covers Shanghai and the three neighbouring provinces of Jiangsu, Zhejiang and Anhui, which together make up the most densely populated – and most affluent region – in China, accounting for one-sixth of the country’s population or at least 220 million people.

Observers said they believed that President Xi Jinping, a former Communist Party chief of Shanghai and Zhejiang, was personally behind the integration plan.

Xi promised in November last year that the plan would become a national policy, on a par with his signature Belt and Road Initiative.

The region has long been seen as a jewel in the crown of China’s economic transformation, with a total economic output of 21 trillion yuan (US$3 trillion) by the end of last year, or a quarter of the national gross domestic product. But it has been at a huge environmental price, with widespread water, soil and industrial pollution.

The 30,000-word plan, released by the State Council on Sunday, has two main goals: achieving socio-economic integration by 2025 and then finalising it by 2035. But it did not give details on how it would be implemented.

China moves to aid slowing economy by accelerating issue of 1 trillion yuan of local government bonds Chen Jie, a chair professor at Shanghai Jiao Tong University’s China Institute for Urban Governance, said that like the Greater Bay Area plan to turn Hong Kong and neighbouring cities into a global innovation and financial hub, the Yangtze River Delta scheme was aimed at creating fresh impetus in the face of daunting economic bottlenecks.

“[It] comes as China’s economic slowdown is worsening, and lays out a vision and new direction that could help rally support,” Chen said.

But unlike Beijing’s national five-year development plans, which contain mandatory policy goals, these regional blueprints only set medium and long-term strategic directions, which are expected to be followed by more detailed plans from provincial authorities, according to Chen.

However, Zhang Lifan, a Beijing-based political analyst, noted that despite state media’s efforts to put a positive spin, the lack of details in such grandiose development plans would inevitably hamper implementation.

“We’ve seen more than a dozen grand development blueprints under Xi, which set out beautiful visions but lack feasibility and often contradict basic economic and market rules,” Zhang said.

He said the latest plan for the Yangtze River Delta was apparently initiated by Xi himself and its prospects remained in doubt largely because of political infighting within the party, the competition for economic prominence between Shanghai and other provinces, and rivalry among top cadres in the region.

“Its fate largely depends on smoothing out tensions among economically developed areas and how privately owned business, which have thrived in the region for decades, fare in its implementation,” Zhang said.

China’s state-owned enterprises help protect economy from foreign pressure and risks, says Communist Party economist

According to the plan, the region will become a pilot for a number of experimental policies – especially ones that narrow the socioeconomic divide and relate to economic and industrial restructuring. If successful, the policies could be rolled out nationwide.

Other highlights also include boosting hi-tech innovation, upgrading the Shanghai free-trade zone into a regional one, expanding public services such as health care for an expanding ageing population as well as tackling environmental woes.

But while the Greater Bay Area focused on innovation, the Yangtze scheme was more about high-quality and high-standard development, analysts said.

“It is essentially calling for common prosperity, which is more about strengthening coordination, narrowing gaps between developed areas and less developed ones, and avoiding excessive competition,” Chen said.

Among the 27 core cities to spearhead social and economic equality are Shanghai, Suzhou, Wuxi, Changzhou, Nanjing in Jiangsu, Hangzhou, and Wenzhou.

The European Union Chamber of Commerce welcomed the blueprint but said China needed to do more to deliver real change.

“In Chapter 11 – building a high-level Shanghai FTZ, it mentions [the need] to realise freedom in investment, trade, international transport, and make better and more open policies to facilitate entry and exit for foreign talent,” Carlo D’Andrea, the chamber’s Shanghai chairman, said. “All of these policies already existed in various Shanghai government documents but none of them have made much progress.”

China, US push global debt towards record US$255 trillion as trade war continues to impact global economy

Wang Chunxin, Bank of China (Hong Kong) principal economist, said the promotion of the Yangtze region was Beijing’s latest attempt to counter global protectionist moves and to spur competition among the regions.

“It is natural for regions and cities to compete … But they have different positioning and market roles and it is possible that they could cooperate at the national level, which is good for the country’s development,” he said.

Ivy Lu, head of research at real estate consultancy CBRE Eastern China, said the urbanisation process had slowed in China in recent years, and building of a city cluster was a good way to remedy this. And, with Shanghai as the leader, Lu expected to see a world-class city cluster that would be “globally influential”.

Dai Xingyi, deputy director of the Urban Development Institute of Fudan University, said it was almost inevitable that the Yangtze River Delta would to become a test bed for Beijing’s efforts to promote regional integration, given the shared regional identity in area.

“[But] judging from the European Union’s experience, we’d better not to expect a surge in economic growth from further integration of this area. However, the people will really benefit from this,” Dai said. “Better regional integration allows essential productive factors, including labour, to move freely and play a bigger role. People will have more choices.”

There would also be better road links and more integrated efforts to cut pollution, he added.

“For example Shanghai is trying hard to minimise pollution in Qingpu district which borders Jiangsu, but Jiangsu has set up many polluting factories there. As the area works as a whole now, it will be easier to coordinate the distribution of industry and improve efficiency in environmental protection,” he said.