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Liu Shijin

Problems with the allocation of productive forces (No 108, 2014)

2014-07-23

By Hou Yongzhi, Liu Yunzhong, Sun Zhiyan and He Jianwu, coordinated regional development and allocation of productive forces research team, Research Department of Development Strategy and Regional Economy, Development Research Center of the State Council (DRC)

Report No 108, 2014 (Total No 4607)

Summary:

The idea of the allocation of productive forces originated in the Soviet Union, but it is strangely similar to the spatial planning and industrial agglomeration of Western market economy theory. The optimal allocation of productive forces has to be consistent with coordinated regional development and must increase efficiency, promote fairness, and maintain sustainable development. Optimal productive force allocation can be done at the macro-, meso-, and micro-level, each with problems to be solved. Also, distribution needs to deal correctly with gathering and dispersing as well as professionalization and diversification. The problem with China's allocation of productive forces are: first, industries tend to become more similar across regions without evident advantage; second, the relative gap between regions has narrowed, but the absolute gap is widening; third, some regions' resources and environment cannot support the population and economic agglomeration; and last, city size and spatial structure need improvement, but city connections and cooperation are weak, so we need an aggregation effect in urbanization.