Against the backdrop of the financial crisis, regional economy is overtaking industry to become the engine driving China's economic development. In addition to invigorating industry, the central government is also using regional economy as a new way of thinking in promoting economic growth. The passage of the Pearl River Delta (PRD) reform and development plan by the State Council at the end of last year and the implementation of the construction plan for the economic region on the west coast of the Taiwan Strait at the beginning of this year are clear signs that the central government is expediting the planning and development of regional economy.

In late March, the National Development and Reform Commission (NDRC) organised a study mission to the Yellow River Delta in Shandong and map out a plan for submission to the State Council for consideration. According to sources, following the emergence of the PRD and Yangtze River Delta (YRD) as China's regional economic development centres, the central government will invest Rmb100 billion this year in expediting the development of the Yellow River Delta region. Efforts will be made to explore a high-efficiency, environmentally-friendly regional development model and to participate in the economic development of the Bohai Rim and Northeast Asian regions.

Meanwhile, the Plan for Promoting the Development of the Central Region arousing wide concern has also been submitted to the State Council and is awaiting examination and approval. According to analysis, integration of this regional economic circle and connection between different regions will generate immense investment and employment opportunities. Examples include the Hong Kong-Zhuhai-Macau Bridge within the Pan-PRD region which involves an investment of over Rmb70 billion; the Shanghai-Hangzhou express railway in YRD with an investment of nearly Rmb30 billion; and the Beijing-Shanghai express railway connecting Beijing, Tianjin and Tangshan with an investment exceeding Rmb200 billion.

As industries on the southeastern coast are increasingly shifting to regions with rich labour resources, low cost and an established industrial base, the economy of the central and western regions is gradually taking shape. Furthermore, to counter the current financial crisis, local governments are reaching out to neighbouring provinces in a move to combine geographical, resource and market advantages, and foster regional growth poles. It is understood that Hebei plans to spend Rmb1.1 trillion this year on promoting cooperation with neighbouring regions; Heilongjiang will give key support to developing Russian-trade economic belts such as Harbin, Mudanjiang and Suihua in a bid to boost trade with Russia, Japan and Korea; Shaanxi in the western region will use Xian as its focal point to expand railway construction and accelerate the turnaround time of regional logistics services.