Dreams As Big As The West

A vicious sandstorm is scouring the city of Xining, on the southern outskirts of the Gobi Desert. Inside his office, sheltered from the blasting wind, Ge Jianbei is daydreaming of another desert, halfway around the world from Qinghai province and the grimy desolation of its capital. On a recent trip overseas, the deputy head of Xining's Foreign Trade Bureau saw Nevada and fell in love with the place. The parched landscape reminded him of the Gobi--while the dazzling extravagance of Las Vegas reminded him of nothing he had ever seen.

The blend of the familiar and the fantastic got Ge thinking. Back home, he and his colleagues drew up a proposal to transform Xining. If recent rumors pay off and Beijing decides to legalize gambling in some parts of China, Ge intends to be where the action is. He says an American company has already promised him it would put up $120 million for casinos and horse-racing facilities. Ge is aching for the opportunity: "I want to make Xining the Las Vegas of China!"

At first glance his quest seems absurd. Xining sits in the middle of China's western hinterlands, the poorest, most backward part of the country. Poverty and neglect have dominated this region for centuries. To easterners the very name of Qinghai province has always evoked images of barren desert and banishment. Today, per capita income across western China is less than half that of the east coast, and the potential for civil unrest is starting to scare Beijing. The west is home to China's largest and most restive minority groups: Uighurs, Hui Muslims and Tibetans among them. Ethnic resentment is rising dangerously in places like Xinjiang (next story). "The worst-case scenario--and what we're trying to avoid--is China fragmenting like Yugoslavia," says Hu Angang, an economist at the Chinese Academy of Science. "Already, regional [economic] disparity is equal to--or worse than--what we saw in Yugoslavia before it split."

China's leaders urgently wish to avoid such a disaster. So they've kicked off a sweeping, multibillion-dollar crash program to achieve what no previous Chinese regime has ever truly managed: taming the west. It just might be the most ambitious such campaign in China's history: no one seems to know what the total cost might be, or where all the money is going to come from. The "go west" drive encompasses 5.4 million square kilometers and 300 million people spread across six provinces (Gansu, Guizhou, Qinghai, Shaanxi, Sichuan and Yunnan), three "autonomous regions" (Ningxia, Tibet and Xinjiang) and one city (Chongqing). Last month the president, Jiang Zemin, visited Gansu and Ningxia to promote the plan, publicly declaring its success to be crucial to China's social stability, the Communist Party's hold on power and the very "revitalization of the Chinese people."

Most people in the hinterlands aren't sure yet what to think. Party leaders have been promising them better lives ever since 1949. While Deng Xiaoping's reforms brought new technology and capital gushing into the east coast's Special Economic Zones in the 1980s, the western provinces lagged far behind, their energy sapped by too many money-pit state-owned enterprises and not enough private enterprise. "To get rich is glorious," Deng said--but most westerners had to take his word for it.

In some off-the-path settlements the poverty and isolation are startling. Three years ago, for example, Prime Minister Zhu Rongji visited a remote Guangxi village called Three-Legged Goat. The only water came trickling into the village along a metal wire the inhabitants had stretched from a mountain stream above--they were too poor to afford even a pipe. China's top officials were shocked to learn how out of touch some westerners are. When Jiang visited one poor Guizhou hamlet in 1996, he was puzzled by the perfunctory welcome he received. The peasants acted as if they weren't sure just who their visitor was. In fact, they did not know. When questioned afterward, the villagers had only the foggiest notion of Jiang's role as president and general secretary of the Chinese Communist Party. They began to comprehend his status only after party officials told them he was "like the emperor, or a king."

Jiang's campaign, officially launched this year, is still too new to have accomplished much. If it works, though, the west's inhabitants can expect a world of difference. The development drive includes plans to lure outside investment, to help provide plumbing for the 50 percent of the rural population still without running water, even to connect the west to the Web. "I'm not only going to build roads," boasts Bai Enpei, Xining's Communist Party secretary. "I'm going to pave an Information Superhighway." Most of the really big-ticket items announced so far have been public-works projects: highways, rail lines, an international airport to serve Xian, the aspiring high-tech center of Shaanxi province, and a natural-gas pipeline that will eventually extend from Qinghai's Sebei Basin all the way to Shanghai.

Government officials in the go-west campaign insist it can succeed where previous efforts have failed. For one thing, they say, this is the region's first development plan ever designed to be driven by market forces and private initiative. Until a few years ago even domestic businesses steered clear of remote provinces like Qinghai, notorious for its labor-reform camps and top-secret defense facilities. Now the hinterland has put out a welcome mat for outside investors. Enterprises throughout the region are scrambling to list on the stock exchange, find cheap credit and woo foreign partners. "Please tell Western investors they're welcome to come here," pleads Liang Xiaobo of Qinghai's communications department. "They can get rich."

The money players are already flocking to the ancient imperial capital of Xian. The city's colleges and research centers are swarming with high-tech talent--and with corporate investors eager to bet on a winner. IBM has put up $20 million to help establish a software-development platform in town. Another computer giant, HP, has committed $8 million for an "e-commerce solution center." Even hardscrabble towns in the provinces are racing to get wired.

The go-west developers could hardly ask for a more enthusiastic salesman than Yang Haiwen. The son of poor peasants, the 26-year-old Forestry Bureau employee developed a love of computers several few years ago at the Qinghai Agricultural and Forestry Vocational School. Today he grows pine seedlings and other plants at a nursery about 10 kilometers outside Xining. Yang is in charge of the computer that controls the irrigation and climate of the nursery's two giant high-tech greenhouses. At present he actually lives in the computer control room, basically an austere sentry booth furnished with a bed, a chair and a desk for the computer. But he couldn't be happier: a massive reforestation program is among the government's 10 largest go-west projects. Many Chinese officials are convinced that without proper safeguards the development campaign will bring environmental ruin. Yang has already begun raising the first crop of seedlings for the program. "I owe this all to the western-development campaign," Yang told NEWSWEEK. "It's bringing opportunities to all of us."

Development fever has even hit a Taoist temple clinging precariously to the side of North Mountain outside Xining. One of its pavilions is adorned with a red banner proclaiming: grasp the western development drive. What benefit could the temple's 16 priests and three nuns possibly expect from Jiang's plan? "We need to develop because we're so poor," says a young disciple wearing a bright yellow silk robe. "We'll become a tourism center. We still need $240,000 to finish renovating the temple. Some money was supposed to come from Taiwan, but it never did." The head priest is waging a development effort of his own, planting roses, pink camellias, yellow tulips, fruit trees and pines on the barren hillside below the temple. "There used to be a saying: 'Flowers and trees will never grow on North Mountain'," says the disciple. "Now people can hardly believe their eyes."

Jiang should be so lucky. One of his pilot programs, an antipoverty project in Qinghai, funded by a $40 million interest-free loan from the World Bank, was supposed to serve as a model of its kind. The plan was to relocate 58,000 Han Chinese and Muslim farmers to a less impoverished area. But two weeks ago an internal inquiry by the bank concluded that the loan was approved in violation of the bank's own rules. The bank had failed to conduct the required assessments of environmental impact and social disruption, and there was no study of alternative resettlement sites. Critics say the relocation was merely a ruse to take over traditional ethnic Tibetan pastures near the city of Dulan, some 300 kilometers east of Xining. The bank is still reviewing its decision.

Tibet is a prickly issue in Qinghai, where ethnic minorities, mostly Tibetans, constitute 42 percent of the population. The Dalai Lama himself was born in the Dulan area, and the magnificent Taersi Monastery, outside Xining, is one of Tibetan Buddhism's most sacred shrines. But provincial officials insist they are getting a bum rap on Dulan. Luo Chaoyang, head of Qinghai's economic-planning commission, says the area in question was so sparsely populated, there was no society to disrupt. "Basically there were no people living there," says Luo. "Go see for yourself."

The Dulan area certainly does look wild and forbidding, but it's not altogether vacant. One of the inhabitants is Chen Congjiang, the disgruntled Han Chinese proprietor of the Fatty Pork Restaurant. He opened the place after he stopped getting paid at the labor re-education farm where he worked. Now the government is building a new highway that will bypass his crumbling stretch of road. Chen worries that his business won't survive. He has protested in every way he can think of, putting up posters and even traveling to Beijing to petition the Communications Ministry. "Development is supposed to bring us benefits," he grumbles as he stirs an order of hand-pulled noodles on a blackened old wok. "It's not supposed to put us out of business."

There will be many more such complaints in the years ahead, as the massive development effort unfolds. Large sums of money always go missing. Planners underestimate potential risks to the environment. Local pools of skilled labor run dry, and outsiders have to be brought in for the job--if they're willing to come. Unskilled workers demand new training programs. And anything China does or doesn't do inside Tibet is an occasion for international protests. A recent economic spurt there has only worsened ethnic tensions.

All the same, Jiang has little choice but to push on with his go-west drive. He has to do something. NEWSWEEK has learned that a party internal survey recently asked local authorities what might happen if the east-west income gap went unaddressed. Eighty-four percent said "social instability," and 16 percent said, "The country might split up." There's a rough road ahead in any case. Deng's "open door" reforms sounded like a good enough idea in 1980, but no one was sure they would actually work. They did, and eastern China became a mighty engine of growth and modernization. Now Jiang needs to finish the job--if he can.