June 21, 2010 / 2:06 PM / 9 years ago

In China's Qinghai, prosperity is a long way off

AWUHU, China (Reuters) - Chatting in this village of mainly mud-wall houses perched on the Tibetan highlands, Dorje Ka pauses when asked what would most improve his standard of living.

A Tibetan woman arrives for a Fire Puja ritual at Longwu monastery in Tongren, Qinghai province October 24, 2009. REUTERS/Jason Lee

Running water would be nice, the 24-year-old Tibetan schoolteacher finally replies.

Dorje’s village, some 1,400 km (875 miles) southwest of Beijing, is better off than some others nearby. At least it has a spring.

But it’s fair to say that, if China does take over the world one day, this eastern part of Qinghai province around the monastery town of Tongren will not form the spearhead.

A visit to China’s vast interior is a salutary reminder that the skyscrapers and luxury boutiques of Beijing and Shanghai are an exception to the rule: in 2005, China still had 254 million people consuming less than the international poverty standard of $1.25 per person per day, according to the World Bank.

The western provinces, which include Qinghai, account for about half of China’s poor, well above their 29 percent population share, and that poverty is most severe in mountainous and minority areas.

Barren, sparsely populated Qinghai ranks 22nd among China’s 31 provinces, regions and municipalities measured by income per capita, which averaged $3,343 in 2009. Property prices in Xining, the unprepossessing capital, are less than a fifth of those in Beijing.

Testifying to the government’s development drive, new public housing and schools are dotted around the area, while extensive water management works are under way.

The teachers in Awuhu village’s vocational school now have access to the Internet, even though the pupils do not, while China Mobile has come to the nearby village of Shuangpengxi within the past two years.

But in only three provinces is life expectancy lower than in Qinghai, and only two have worse illiteracy rates.

DISADVANTAGES

In theory, market forces might be expected to lift the likes of Qinghai out of poverty.

After all, manufacturers are rushing to build factories in central and western China, where costs are much lower.

As a spate of strikes for higher pay in southern China shows, employers are also jacking up wages in their coastal factories to lure migrant workers increasingly reluctant to toil far from home in alien and alienating factory towns.

In practice, however, rural Qinghai is one of many corners of China that are unlikely to be riding the elevator to urban, industrial prosperity in a hurry.

Firstly, eastern Qinghai does not have much of a cost advantage over central provinces, where wages and resource costs remain quite low, said Wang Xiaoyi, director of the Center for Rural Environmental Social Studies at the Chinese Academy of Social Sciences, a government research outfit in Beijing.

Yet transport links in those central provinces, such as Shaanxi and Henan, are much better than in Qinghai.

As for southern and western Qinghai, their mineral riches might be a draw for mining companies, but the harsh environment and remoteness are a put-off for industry, Wang told Reuters.

“Generally speaking, the likelihood for manufacturing businesses to shift to Qinghai on a large scale is small at this stage,” he concluded.

SKILLS IN DOUBT

Secondly, Qinghai does not have compelling labor skills to offer.

Demand for labor across China is already running into supply constraints. The 15-29 cohort that is most attractive for employers has been shrinking for several years, and the overall working population will peak around the middle of this decade.

Rural China on paper has anywhere from 100-150 million “surplus” workers, according to academics’ estimates, but many of them are already too old and so not easily available to fuel manufacturing and services growth.

“The transferable surplus labor from rural areas is only about 50 million, most of which are in the hinterland,” investment bank CICC said in a recent report.

Dzuoda, who uses just one name, is one of the “transferable”. A 17-year-old high school student with permed hair, his ambition is to go to university and work as a designer in Xining, a four-hour drive away from the drab township of Dorfte.

Yet many of Qinghai’s Tibetans, who make up 23 percent of the province’s population of 5.6 million, seem content to stay within their communities.

Few speak good Chinese, which puts them at a disadvantage competing for work outside their villages, and several of those interviewed said they lacked the connections to get faraway jobs.

Wang, the government researcher, said that while peasant farmers in southern and western Qinghai are traditionally reluctant to leave the land, people in eastern Qinghai are more willing to go out and get a job.

But he added: “Their adeptness for modern industry may be weaker than people from central regions, who have more than 30 years’ experience of working in factories. Qinghai has less than 10.”

TIBETAN GOLD

One reason why many Qinghai Tibetans prefer to stay at home is the valuable caterpillar fungus that grows on the plateau.

Dealers can sell good-quality fungus for as much as 130,000 yuan ($19,000) a kilo to be ground down into traditional medicines said to be good for the immune system and the complexion.

Villages are largely deserted in May and June as all but the very young and old go foraging on the hillsides. Each picker can earn 30,000 yuan in a month, a fortune in this part of the world.

Jamyang, a yak herdsman in Dorfte, proudly showed off his fungus booty the other day, which he said would make up about three-quarters of his income for the year.

He smiled at his good luck but said, “I don’t want my son to be picking caterpillar fungus when he grows up.”

Additional reporting by Michael Wei in Beijing, Editing by Dean Yates

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