EmailI. Growth and Change: Basis of Development
Economic development is a process of creating and accumulating wealth. In economics, Gross Domestic Product (GDP) is a core indicator measuring the degree to which a country or region creates and accumulates wealth. It is also widely used to measure a country's or region's economic growth, or even the level of social development.
1. Growth of Economic Aggregate and Stimulation of Investment
To discuss the topic of growth and development, we first deal with the basis and conditions of development. In 2008, the GDP of Tibet was 39.591 billion yuan, and the per capita GDP reached 13,861 yuan. Although the per capita GDP in Tibet was much less than the national average of 22,698 yuan, we should take into account the fact that the economic growth of Tibet started from a very low level: At the time of the 1959 democratic reform, the total output value of Tibet was only 174 million yuan, and the per capita GDP was only 142 yuan.[1]
In reviewing the development history of the Tibet Autonomous Region over the past half-century, we can see that its economic development has experienced three main historical stages to achieve the growth of economic aggregate (see Figs. 1 and 2).
-- 1959-1965: From the democratic reform to the formal establishment of the People's Government of the Tibet Autonomous Region
The 1959 democratic reform abolished feudal serfdom, and made fundamental reforms in the ownership of the means of production, which prompted rapid economic development. As demanded by the serfs, who accounted for the overwhelming majority of Tibet's population, 95 percent or more of the land, livestock and other major means of production in Tibet that had been owned by the feudal upper class [2] (five percent of the population) were distributed among serfs; the private economy ownership of farmers and herdsmen was set up; and policies in favor of stable development were carried out. The reform of the ownership of the means of production greatly liberated the productive forces, and therefore Tibet saw unprecedented rapid growth in its economy. Some documents indicate that in the decade prior to the democratic reform in 1959, Tibet's economic aggregate was around 150 million yuan, showing that its economy was almost stagnant. In the six years from the 1959 democratic reform to 1965, when the Tibet Autonomous Region was established, Tibet's economic aggregate rocketed to 327 million yuan, with an annual growth rate of 11.1 percent. Tibet's economy entered a stage of rapid development.
-- 1965-1984: From the formal establishment of the People's Government of the Tibet Autonomous Region to the adoption of the reform and opening-up policy in 1978
After the People's Government of the Tibet Autonomous Region was formally established in 1965, the central government adopted policies one after another to give economic support to Tibet to guarantee its stable economic development. In 1984, when the inland areas saw initial achievements in reform and opening-up, the central authorities held the Second Tibet Work Symposium in Beijing. The meeting decided to continue the special preferential policy for rehabilitation in Tibet's rural areas: In farming areas "land should be used by individual farm households for their own production, a policy which would be kept unchanged for a long time to come"; in pastoral areas "livestock should be owned and raised by individual herder households, a policy which would be kept unchanged for a long time to come." In the same year, Tibet's government declared that it would carry out the policy of opening to inland China and to foreign countries. For this, 1984 is usually regarded as a key year in Tibet's opening-up. [3] We have noticed that in most of this period Tibet's economy experienced relatively stable growth, with an annual growth rate of 7.82 percent, although the growth rate was slower than that in the previous stage because Tibet's reform and opening-up was nearly six years later than inland China's, and it underwent the negative influence of the "cultural revolution" (1966-1976) at the start.
-- 1984-present: From the adoption of the reform and opening-up policy to the present
Since Tibet launched reform and opening-up in 1984, the strategy of opening-up and the basic role of the market have provided strong support for Tibet's economic development. In the meantime, the central government's policies and financial support, coordinated assistance from more developed inland provinces and cities and the joint efforts of the people of all the ethnic groups in Tibet combined to lift Tibet to a stage of the fastest economic growth in its history. The economic aggregate soared from1.368 billion yuan in 1984 to 39.591 billion yuan in 2008, an increase of 11.3 times within 25 years calculated by comparable price, and the annual growth rate reached a high level of 10.5 percent. To promote better and faster economic development in Tibet, the central government held the Fourth Tibet Work Symposium in 2001. The meeting decided upon 117 state-invested projects, involving a total of 31.2 billion yuan; moreover, the central government provided 38 billion yuan in financial subsidies, while 70 coordinated assistance projects and Tibet-aid funds from around the country involved over three billion yuan. Driven by such a huge investment, the economic aggregate of Tibet rose from 13.916 billion yuan in 2001 to 39.591 billion yuan in 2008, with a high annual growth rate of 12.4 percent. In 2006, the per capita GDP of Tibet exceeded 10,000 yuan, a milestone marking that Tibet was no longer in the last place in China economically. [4]
Investment has had a remarkable influence on the economic growth of Tibet. Analyses of Tibet's investment in fixed assets and local revenue and expenditure show that from 1959 to 2008 Tibet's investment in fixed assets grew from 29 million yuan to 30.333 billion yuan, and the annual growth rate reached 15.2 percent. In 1985, the second year of Tibet's opening-up, the investment in fixed assets accounted for 42.2 percent of that year's GDP, at least 10 percentage points more than in the past. From then on, Tibet's investment in fixed assets has grown by a big margin, and its proportion in the GDP has maintained a relatively high level. In each of the 10 years from 1984 to 1994, the proportion of Tibet's investment in fixed assets in its GDP was more than 40 percent. The figure rose to 66 percent in 1995, and dropped to between 45 and 47 percent in the two years from 1996 and 1998. From 1998, Tibet accelerated its investment in fixed assets. In the six years from 2003 to 2008, the proportion of Tibet's investment in fixed assets in its GDP has been more than 75 percent, over 20 percentage points more than the national average (see Table 1 and Figure 3).
Thus we can see that investment has played an increasingly important role in the economic growth of Tibet in recent years. But we must point out that most of the investment that local governments in Tibet use to develop their economy is not from self-accumulation or market allocation, but from the central government's fiscal transfer payment and input for various projects in Tibet, and assistance from more-developed inland provinces and cities.
Analyses of relevant statistics [5] show that the central government's transfer payments to Tibet amounted to 201.9 billion yuan between 1959 and 2008 and the figure totaled more than 154.1 billion yuan between 2001 and 2008, making up 93.7 percent of Tibet's financial revenue in the same period. This means that for every 100 yuan that Tibet spent, over 90 yuan came from the central government.
As China's national strength has steadily increased since the introduction of the reform and opening-up policy, the central government has paid more attention and offered more support to the Tibet Autonomous Region, which is located in a border area in southwest China and whose economic development traditionally lagged behind other areas of the country. To accelerate Tibet's development, the central government held four Tibet Work Symposiums in Beijing in 1980, 1984, 1994 and 2001, respectively, providing more fiscal transfer payments and more investment in key projects for Tibet, bringing into being a framework for all places in China to provide assistance to Tibet. We have noticed that in the 22 years from 1985, not long after Tibet began the reform and opening-up, to 2007 the central government's financial subsidies for Tibet totaled 156.4 billion yuan. In 2007 alone, the central government's financial subsidy for Tibet was as high as 28 billion yuan, equivalent to the total subsidies Tibet received from the central government from 1959 to 1995. [6]
In addition to financial support, the central government also provides the investment for most of the major projects in Tibet. The Third Tibet Work Symposium decided upon 62 state-invested projects and 716 projects with assistance from other places, involving a total input of over eight billion yuan. The Fourth Tibet Work Symposium decided upon 117 state-invested projects, involving a total investment of about 31.2 billion yuan. Moreover, other areas have assisted Tibet with 70 projects, involving a total investment of over three billion yuan. In January 2007, the central government discussed and adopted in principle the Tibet Autonomous Region's Project Scheme in the 11th Five-Year Plan Period (2006-2010), planning to invest 77.88 billion yuan to build180 projects in Tibet. The total investment was expected to exceed100 billion yuan.
In January 2007, the central government discussed and adopted in principle the Tibet Autonomous Region's Project Scheme in the 11th Five-Year Plan Period (2006-2010), planning to invest 77.88 billion yuan to build 180 projects in Tibet. The total investment was expected to exceed 100 billion yuan.
