Economic and Technological Zones: Economic Strategy in the Tibet Autonomous Region

Executive Summary:

• New Economic and Technology Development Zones (ETDZs) in the Tibet Autonomous Region (TAR) are focused on pockets of the Han population, which will exacerbate tensions within the region. The Tibetan economy is already largely under Han control (except for in the agriculture and livestock sectors), and Han people constitute the majority group in many of Tiber’s urban centers.
• The TAR government has set up the zones to import practices from elsewhere in the People’s Republic of China (PRC) and shift the region’s economy away from traditional sectors and toward export-oriented industries, construction, and even high-tech manufacturing.
• The TAR’s external trade is currently limited to Nepal, due to ongoing border tensions with India. Meanwhile, infrastructural challenges hampering the development of the Sichuan-Tibet railway or national highways connecting the TAR with other provinces suggest that further integration with the rest of the PRC remains some way off.
• In a related policy, the PRC has developed border towns strategically located near land border ports that it has built along its borders with India, Nepal, and Bhutan. Infrastructure buildup on the border could also serve a dual-use purpose in the case of a conflict, as has been the case in India in recent years.

In June, Wang Junzheng (王君正), Party Secretary for the Tibet Autonomous Region (TAR; 西藏自治区), went on an inspection tour of the Lhasa Economic-Technological Development Zone (Lhasa ETDZ, 国家级拉萨经济技术开发区) in the regional capital’s Doilungdêqên District (堆龙德庆区). While there, he instructed officials to improve various aspects of the zone to help boost businesses such as cross-border e-commerce and support Tibetan products to “go out,” creating a new source of growth for the region’s foreign trade (Lhasa Daily, June 13). The readout of Wang’s visit reflects a concerted focus on ETDZs and expanding overseas trade as local growth drivers.

The government of the People’s Republic of China (PRC) has been trying to recalibrate Tibet’s economy over the last 15 years. In 2008, angry protests triggered a shift in government policy to massive investments in internal security and tighter control of the socio-cultural sphere (see China Brief; May 13, 2008, September 21, 2017, September 22, 2020). Although the region has registered growth rates above the national average since the 1990s, this has largely been fueled by massive subsidies and transfer payments by the central government. [1] Since 2008, the government has focused on developing the tourism, mining, and construction industries, but their potential to help shift to indigenous growth remains limited. Provincial policymakers therefore have launched an array of initiatives that broadly replicate the growth model of inland provinces (内地).

A key feature of the emerging strategy is the establishment of several Economic and Technology Development Zones (ETDZs, 经济技术开发区) to attract investments, promote exports, and incubate industries. New provincial-level ETDZs were established in Chamdo City (昌都市) in 2013, Lhokha (山南市) in 2018, and Shigatse (日喀则市)—near the border with Nepal—and Nyingchi (林芝市) in 2019 (see Table 1). The State Council established an ETDZ in Lhasa in 2001 (State Council Information Office [SCIO], September 19, 2001). The new ETDZs seek to promote industrialization, help reduce the urban-rural gap, and pursue other policy objectives through encouraging urbanization, export-oriented industries, commercialization of agro-pastoral products, and tourism.

ETDZs as Hubs for Regional Integration

The arrival of ETDZs in the TAR represent a belated extension of a national strategy adopted in 1978 (People’s Daily, October 1, 2008). While long held as a “pole of socio-economic development (重要的经济和社会发展极),” EDTZs were largely concentrated in eastern and central regions of the country until their rapid expansion to western provinces after 2010 (Sogou Baike, July 17; MOFCOM, June 13) [2]. The TAR has established four provincial-level ETDZs in the last 11 years. However, the Lhasa EDTZ remains the region’s only national-level ETDZ, lagging behind other western provinces and regions. [3]

The policy of setting up ETDZs has been articulated and endorsed politically at higher levels, underscoring their significance in overall economic planning. For example, the Thirteenth Five-Year Plan of the Tibet Autonomous Region (2016-2021) laid out plans to establish ETDZs in Shigatse and Lhokha (Tibet Government, April 4, 2018). At the same time, the Western Development Conference, the Tibet Coordination Group, the highest Chinese Communist Party (CCP) coordination body of Tibet policy, and the sixth and seventh Tibet Work Forums have consistently underlined the importance of the Lhasa ETDZ (NDRC, January 23, 2017; Reform Data, June 29, 2010).

Table 1: National- and Provincial-Level Economic and Technological Zones in the TAR

Source: TAR DRC, April 4, 2018, page 48; Lhasa ETDZ, accessed July 16.; Chamdo Government course, accessed July 16; Xinhua, accessed July 17.

ETDZs are designed to create functional linkages with local industrial parks (产业园区) and rural commercial enterprises like farmers and herders’ cooperatives (农牧区合作组织) (Shannan Government, December 20, 2018). Both industrial parks and ETDZs aim at incubating more “non-public economic organizations (非公经济组织)” to increase local tax revenue (Tibet Daily, 29 November 2018; China Tibet News Network, 12 October 2023). [4] In the long run, the flourishing of such enterprises is also intended to incentivize Han private entrepreneurs to invest in the region. The TAR has 74 industrial parks, three-quarters of which are based in Lhasa city, followed by Nyingchi, Shigaste, and Lhokha. Nagqu, Chamdo, and Ngari each have one industrial park. This geographic distribution reflects the economic focus of the government on the “central economic zone (中部经济区),” a term used in previous regional planning documents. [5]

A related set of initiatives comes under the umbrella of “Five Cities and Three Hours Economic Belt (五城三小时经济圈), centering on Lhasa and Lhokha prefecture-cities and creating linkages with Shigatse in the west and Chamdo in the east (Map 1; Xinhua, 30 May). This regional integration plan, begun in 2018 and set to complete its second phase of implementation in 2025, will improve railway connectivity by completing the Lhasa-Nyingchi line of the Qinghai-Tibet railway, as well as road and air transport infrastructure (TAR Government, April 4, 2018; TAR Development Reform Commission [DRC], February 2018). At the regional planning level, these interrelated projects and initiatives are crucial for creating local sources of revenue and growth. Lhasa and Lhokha, whose combined populations equate to 41 percent of the TAR’s total, contribute 48 percent of the region’s GDP and 58.8 percent of total revenue (TAR DRC, 2018). This population has grown significantly since 2016 due to the massive relocation of farmers and herders from Nagqu to Lhasa, Nyingchi, and Lhokha (Human Rights Watch, May 21).

Emphasis on “sub-regional integration” since 2014 follows significant investment in infrastructure to support new urbanization and export-oriented businesses, especially in ethnic handicrafts, animal husbandry, and ethnic medicine. Beyond the railway construction, other projects include Gonggar International Airport (which is jointly owned and operated by Lhasa and Lhokha) and the expansion of the G560 and G349 highways as well as the S5 expressway.

Development of border towns has been another important policy, as referenced in the Thirteenth Five-Year Plan for the TAR. These include Shiquanhe (狮泉河镇) and Burang town (普兰真) in Ngari, Yadong (亚东) in Shigaste, Longzi Town (隆子镇) and Mainling (米林市) in Lhokha, among others. As part of this urbanization push, the government has upgraded several county-level administrative units to city (urban) status since 2013 to facilitate further devolution of resources and administrative power to local governments. [6]

These border towns are strategically located near land border ports that the PRC has built along its borders with India, Nepal, and Bhutan, as well as the new ETDZs in Shigatse and Lhokha. Currently, the PRC has five land border ports, namely Zhangmu in Nyalam County, Gyirong in Gyirong County, Riwu in Dinggye County in Shigaste on the Nepal border, Burang in Ngari on the Indian border, and Yadong in Shigaste on the India-Bhutan border (Tibet Online, July 5). Land ports along the India-PRC border have been marred by geopolitical tensions along the disputed boundary, leading to negligible trade. Border trade with Nepal, however, remains strong.

The ETDZs and industrial parks focus on export-oriented agriculture, handicraft manufacturing, and Tibetan traditional medicine. There is some heavy and high-tech industry in the TAR, but only in Lhasa’s national-level ETDZ. The focus on agro-pastoral industries is also notable given that the TAR provincial authorities have pushed for commercializing the animal husbandry sector, rigorously creating farmers’ and herders’ cooperatives (农牧区合作组织) since 2009 (TAR Government, August 19, 2021).

Map 1: Outline of Five Cities and Three Hours Economic Belt (五城三小时经济圈) Plan

Source: TAR DRC, 2018.

ETDZs Concentrate on Han Population

The government’s decision to double down on ETDZs at the provincial level reflects an extension of key pillars of the PRC’s economic strategy that began in coastal regions in 1978 to the TAR. Under Xi Jinping, economic policy in the TAR has focused on urbanization and infrastructure in border areas, cross-border trade, and connectivity with Nepal, in an effort to spur local growth drivers and stabilize borders (Xinhua, August 29, 2020; People’s Daily Online, August 26, 2015). In doing so, the provincial leadership has pursued central directives in attempting to develop the TAR’s foreign trade profile over the last decade (See, Center for Himalayan Studies, March).

There have been negative impacts to these policies, however. Heavy subsidization, Han control of the Tibetan economy (except for in the agriculture and livestock sectors), and the marginalization of ethnic Tibetans could cause problems for both the local economy’s prospects and are likely to deepen social tensions. The government’s more recent initiatives could simply exacerbate the problems, particularly as the new parks and zones are focused on pockets of the rising Han population.

Ma Rong (马荣), a sociologist of population in Tibet, has noted that the TAR’s Han population has increased overall but especially in certain pockets. Gar County in Ngari had a Han population ranging from 10 percent to 30 percent, Nyalam and Yadong in Shigaste had between 5 and 10 percent of total population from the 1990s up to the early 2000s. [7] However, these estimates, at best, underestimate the Han population by excluding or undercounting the “floating population (流动人口)” of Han temporary migrants and small businesses. The latest official socio-economic survey statistics suggest that Han people now constitute a majority or close to a majority of the population in specific urban centers like Bayi District in Nyingchi (around 39 percent) [8] and Gar County in Ngari (around 57 percent) (National Bureau of Statistics, 2019). [9]

The establishment of ETDZs signals a commitment to a certain kind of economic strategy, but it will be a while before it begins to bear fruit. ETDZs are designed in part to support exports, but the TAR’s external trade is currently limited to Nepal, due to ongoing border tensions with India. Meanwhile, infrastructural challenges hampering the development of the Sichuan-Tibet railway or national highways connecting the TAR with other provinces suggest that further integration with the rest of the PRC remains some way off.

Notes

[1] See Fischer, Andrew Martin. The disempowered development of Tibet in China: A study in the economics of marginalization. Lexington Books, 2013; and Jin, Wei靳薇. Xizang Yuanzhu yu Fazhan 西藏援助与发展 [Aid and Development in Tibet]. Tibet: Xizang renmin chubanshe. 2010.

[2] Out of 230 national-level ETDZs present by 2022, 104 were established after 2010.

[3] In contrast, other provinces in the western region have a greater number of national-level ETDZs: Xinjiang (9), Ningxia (2), Qinghai (2), Gansu (5), Shaanxi (5), Chongqing (3), Yunnan (5), Sichuan (8), and Guizhou (2).

[4] The TAR also has two High Tech Industrial Development Zones (HTIDZs; 高新技术产业开发区), a national level HTIDZ in Lhasa established in 2022 and a provincial-level one in Chamdo (MOST, January 28, 2023; TAR DRC, November 10, 2023).

[5] Liu, Gang刘刚 & Shen, Lei 沈镭. Xizang chanye jingji buju yu youhua tiaozheng zelue chutan西藏产业经济布局与优化调整策略初探 [Xizang’s Industrial Economy Distribution and Adjusted & Optimized Strategy]. Beijing: Ziyuan kaifa yu shichang, 2007.

[6] The TAR stands as an outlier in this respect too. The pace of upgrading administrative units to urban status has slowed down from the first decade of the 21st century in inland (内地) provinces while it has picked up from 2013 onwards in the TAR. Upgrading administrative units to city status has several interrelated objectives including greater financial power to local county level cities in terms of taxation and planning and greater administrative power. Since 2013, a number of administrative units at prefecture and county levels have been upgraded to city status. Qamdo and Shigaste were upgraded to city status in 2014, Nyingchi in 2015, Lhokha in 2016, and Nagqu in 2018. At county levels, in addition to Mainling and Tsona in 2022, eight new urban districts have been created including Doilungdêqên and Dagze urban districts in Lhasa, and Bayi district in Nyingchi.

[7] Rong Ma. Population and Society in Contemporary Tibet. Hong Kong: Hong Kong University Press, 2011.

[8] As per the Seventh Census, the total population of Nyingchi was 238,936, of which approximately 25 percent (58,983) was Han. This was a substantial increase from the Sixth Census in 2010, in which the Han population numbered 25,162 (Nyingchi Government, June 17, 2021).

[9] Confusion about the actual population persists. Differentiating between various categories used in censuses, socio-economic surveys, and other statistics remains a challenge. The difference between “registered population (户籍人口),” i.e., those who have hukou (household registration) and “permanent population (常住人口)” i.e. the registered population plus the inward floating population and minus the outward floating population is stark. For example, the county level statistical yearbook states that the permanent population of Shiquanhe town (狮泉河镇)—the main population center and capital of Gar County—was 54,947 in 2017 while, in 2019, the registered population was 13, 400, a difference of more than 40,000. The problem is compounded by another contradictory figure in the Seventh Census which pegs the permanent population of the town at 24,112. See, National Statistical Bureau. Zhongguo Tongji Nianjian 2018 (xiangzhen chuan) 中国县域统计年鉴·2018 (乡镇卷) [China County Statistical Yearbook-2018 Rural-Town Edition)]. Beijing: Zhongguo Tongji Chubanshe. 2018, p. 587; National Statistical Bureau. Zhongguo Tongji Nianjian 2021 (xiangzhen chuan) 中国县域统计年鉴·2018 (乡镇卷) [China County Statistical Yearbook-2021 (Rural-Town Edition)]. Beijing: Zhongguo Tongji Chubanshe. 2021, p. 598 & Ngari CCP Committee, January 1, 2021.