The Chinese government has launched a RMB 100 billion ($15.6 billion) fund for the purpose of greater interprovincial economic integration in the Yangtze river delta region, reports Reuters, in an attempt to combat harmful competition amongst local governments.
The capital will be dedicated to infrastructure and technological projects that will promote cooperation between regional authorities, which include Shanghai and manufacturing centres Zhejiang and Anhui. A similar project has also been implemented in the Beijing-Tianjin-Hebei triangle in the north of the country.
The desired outcome is that forging interprovincial economic bonds will erode the often damaging “fortress economy” approach of local governments, whereby rapid growth is pursued to appease Beijing, even at the cost of other regions’ welfare. The result has been deep inefficiencies in commodity production and pollution.