As China's economy continues to grow at an unprecedented rate, there is still a lack of opportunity for many people in the country. With over 250 million people still living in absolute poverty, that's below the threshold of $1.25 (US) a day defined by the United Nations, the country is still seeking further improvement.
One of the key challenges facing the Chinese government is that the vast amount of the economy is focused on the East of China. In the short-term this has led to massive increases in prosperity as cities in the Pearl River Delta and the established ports of Qingdao and Dalian have benefited enormously. In the long-term it's a significant cause of stress as tens of millions of people leave their homes and their families for a year at a time to seek work in these regions.
The centre of the country lags massively behind these prosperous areas and there is a significant need for change before the country becomes further unbalanced between "haves" and "have nots". In fact China now has the most unequal economy in the world with the greatest gap between rich and poor of any nation.
The new 5 year plan announced this week aims to address this, but it cannot operate in isolation. Regional and provincial governments are expected to play their part in levelling the playing field. With this in mind Chengdu and Chongqing the two strongest tier 2 cities in the central region have announced the formation of a new "special economic zone" with a focus on 8 key industries including automotive parts, manufacturing, IT and electronic information, and aviation.
These "special economic zones" are usually designed to facilitate large and rapid investment with massive subsidies available to Chinese companies that participate in the early stages. This means that foreign investors looking to benefit from these arrangements will need to form strategic joint ventures that enable access to the funds.
The initial big winners from this move, which will cover 200,000 square kilometres and impact on 15 cities in Sichuan and 31 districts (or counties), will be the big players in the infrastructure market. In particular these will be listed Chinese corporations with a track record of success in other similar projects.
With the initial phase of development expected to be complete by 2015, it seems that the ideal time to start exploring opportunities for international co-operation in Sichuan is now.
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