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Comment: Weeding out wasteful investment
( 2003-08-29 07:19) (China Daily)

Ten inspection teams sent by the central government to provinces earlier this month have since returned, worried about the problem-ridden development of various economic zones and parks.

The teams were part of the first batch of a national inspection mission jointly initiated by the Ministry of Land and Resources, the National Development and Reform Commission, the Ministry of Supervision, the Ministry of Construction and the National Audit Office.

Their assignment was to inspect the administration of development zones, land leasing operations and trading mechanisms over a period of two months.

The recent inspections were a follow-up to two urgent orders issued by the State Council in July to overhaul the establishment of and irregularities in development zones and industrial parks.

The development zones and industrial parks were first established by the central government in the mid-1980s to speed up the nation's opening-up and reform process.

Many of the zones and parks became the engines of local economic growth, and some of them are still the heavyweights in regional economic development, riding high on the tide of science and technology advancement.

However, the degrees of success of some of the parks and zones have blinded many local governments, which have started setting up various development zones and expanding their existing areas.

According to official statistics, of the existing 3,837 development zones and industrial parks nationwide, only 1,251 have received approval from the State Council or provincial governments.

Many of the zones -- set up by local authorities in a rush -- were way off the mark and failed to attract investors due to their poor infrastructure or policies.

A heap of low-level duplication has also greatly disrupted market order and caused a huge waste of land and resources. In Anji County in East China's Zhejiang Province, an economic zone was expanded in size by more than 13 fold. Yet, most of the zone's land is still idle.

Alarmingly, this is only the tip of the iceberg.

Other problems associated with such blind construction have also surged in recent years.

Most of the land in the zones and parks are requisitioned from farmers, but many of them are not compensated in a timely fashion or adequately.

This obviously has a huge negative impact on the welfare of farmers and is the root cause of various disputes.

Loose land use management also leaves scope for money and power deals, creating a hotbed of corruption. It is estimated that irregularities in the land market lead to a State asset loss of at least 10 billion yuan (US$1.2 billion) every year.

Fortunately, the State Council has uncovered the problems and is now staging a massive overhaul of the zones and parks.

According to decrees, any applications for establishing or extending development zones or rectifying existing development zones should be suspended.

And the investigation is likely to result in the closure of some poorly managed zones and parks.

A cooling down of the skyrocketing development of the zones can be nothing but positive for China's social and economic development, helping the "healthy'' areas to grow strongly while removing the "weeds.''

 
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