Yangtze River Delta Integration: Breaking Barriers for Connectivity

The Yangtze River Delta on China’s east coast, radiating from the alluvial plain near the estuary of the Yangtze River, is a region of key economic importance involving Shanghai Municipality and Jiangsu, Zhejiang and Anhui provinces.

Integration of the Yangtze River Delta refers to a strategic plan to break administrative barriers impeding product and commodity flows between different cities and provinces in the region, form a unified market, promote cooperation and exchange, and achieve infrastructure connectivity, unified governance and shared benefits. The ultimate aim is to shift the Chinese economy from high-speed growth to high-quality development.

Connectivity Strategy

The Yangtze River Delta region has a combined population of 220 million, accounting for one-seventh of China’s total, and its GDP reaches US$3.5 trillion, about one-fourth of the nation’s total. In 2017, per capita GDP of the 16 cities in the core area of the Yangtze River Delta hit US$11,000. The region is home to 26 cities including Shanghai, Hangzhou, Nanjing, Hefei, Suzhou, Wuxi and Ningbo, which comprise one of the world’s largest city clusters and China’s leading economic center in terms of overall strength. It is also considered the most open and dynamic economic region in China.

Today, the Chinese economy has entered a “new normal” period. The international situation China faces is undergoing drastic changes, and the domestic economy has reached a crucial stage of restructuring and upgrading. To achieve higher-level reform and opening up, optimize economic structure and align with development strategies such as the Belt and Road Initiative, the Coordinated Development of Beijing, Tianjin and Hebei, the Yangtze River Economic Belt and the Guangdong-Hong Kong-Macao Greater Bay Area, China needs to accelerate its advancement of integration of the Yangtze River Delta with an eye on optimizing the region’s role in leading national economic development.

Integration of the Yangtze River Delta represents a pioneering step in implementing a strategy of innovative, coordinated, green, open and shared development with the purpose of continuously promoting opening up at a higher starting point through advancing the reform of an economic system featuring market-oriented resource allocation. Based on integrated development schemes, the region is expected to create a world-class industrial cluster with global competitiveness, explore the path for urbanization characterized by coordinated development of small, medium and large cities, and build an international metropolis cluster of global influence. The importance of integration of the Yangtze River Delta is breaking administrative barriers, promoting regional cooperation and blazing a new path for transforming governance modes.

Integration of the Yangtze River Delta is also a significant move by the world’s second-largest economy based on its national conditions to help its people lead better lives. It shares similarities with the economic integration of Europe after World War II in terms of breaking down barriers and building a unified market. Of course, the two cases also have differences. Integration of the Yangtze River Delta is a process of system and development integration between different regions within a sovereign country, implemented under the unified leadership of the central government. In contrast with the intergovernmental integration of politics, economy, currency, trade and foreign relations of European countries under the banner of the European Union, integration of the Yangtze River Delta places greater emphasis on removing institutional and mechanism barriers impeding China’s economic development and reform and opening up, promoting free flow of various factors and optimizing industrial layout to enhance the efficiency of social and economic development. With the rapid urbanization of China, the Yangtze River Delta has become an increasingly important beacon of economic development.

All-round Development

Over the years, the integrated development of the Yangtze River Delta has provided important experience and set a good example for China to develop a socialist market economy with Chinese characteristics. A forerunner in the country’s reform and opening up, the Yangtze River Delta region boasts a higher marketization level, thriving private enterprises and plentiful entrepreneurs. Based on such advantages, the region is working to promote industrial transfer and transregional development of enterprises through market-oriented reforms, gradually remove administrative barriers to enable free, orderly flow of various factors, and advance coordinated development of different areas.

Integration of the Yangtze River Delta has advanced smoothly in recent years. Regional cooperation mechanisms such as the Mayor/Governors’ Seminar, the Meeting of Vice Executive Governors, the Regional Partnership of Provincial Development and Reform Commissions and the Forum for the Coordination of Urban Economy of the Yangtze River Delta Region are already taking shape. Documents such as the Development Plan of the Yangtze River Delta Region, the Development Plan for the Yangtze River Delta City Cluster, and the Three-year Action Plan for the Integrated Development of the Yangtze River Delta were promulgated and enacted, providing solid institutional guarantee for the integrated development of the region.

Within the city cluster in the Yangtze River Delta region, Shanghai plays a lead role, other major cities like Hangzhou, Nanjing, Hefei, Suzhou, Ningbo and Wuxi provide key support with their advanced development, and medium and small cities such as Yiwu in Zhejiang Province and Kunshan, Taicang and Zhangjiagang in Jiangsu Province contribute with their respective industrial strengths.

In recent years, Shanghai has remained committed to becoming a global technological innovation center. In support of Shanghai’s goal, Jiangsu Province announced plans to build a global industrial innovation center and Zhejiang Province set the goal of creating a “digital greater bay area.” An innovation system is taking shape in the Yangtze River Delta region. Moreover, green development has become consensus in the area, with focus on removing regional barriers and making joint efforts to protect the environment in the process of promoting economic development.

Breaking Bottlenecks

The Yangtze River Delta region is still working hard to realize the goal of high-quality integrated development. Now that integration of the region has been elevated to a national strategy, the Yangtze River Delta should seize the opportunity to break bottlenecks hindering its integrated development.

First, the region needs to improve coordinated governance and enhance integration efficiency. Presently, most mechanisms for integrated development of the Yangtze River Delta remain a closed loop from “decision-making to implementation” by relevant governments. To enhance the efficiency of its coordinated governance, the region needs to further merge governmental efforts with market-oriented resource allocation systems and encourage enterprises to advance regional integrated development by optimizing industrial chain layout. Also, measures need to be taken to strengthen relevant legislation.

Second, the region needs to quicken the shift from market integration to social policy integration and from basic public services integration to livelihood services integration. Although the Yangtze River Delta region, especially Shanghai, Jiangsu and Zhejiang, has basically realized equalization in terms of economic development and per capita income, different cities still sharply contrast each other in terms of living standards, technology, education, cultural and healthcare facilities and urban infrastructure. The promotion of connectivity, joint management and sharing of social development resources between different cities in the region is sorely needed.

Finally, the region needs to address homogenized development and excessive competition between different areas, cities and development zones. The integration of the Yangtze River Delta should prioritize institutional and mechanism innovation and build a rule-based, controllable cooperation and competition system. Cooperation aims to achieve more standardized and efficient competition, and competition will further enhance cooperation. 

The author is a professor and executive director of the Research Center for Urban and Regional Development at Zhejiang University.