The Economy of Tibet at a Glance (Part I)

Overall Growth in the TAR

Nominal GDP: In 2000 – 11.78 billion yuan (US $1.47 billion)
In 2007 – 34 billion yuan (US $4.5 billion)
-In 2005 the tertiary sector contributed more than half of the TAR’s GDP growth

-Public education and healthcare are widespread in the Tibetan rural areas, although they are undersupplied and often of very poor quality relative to the rest of China

Disproportional Growth in Urban and Rural Tibetan Areas

-The Tibetan areas today can thus be described as two economies – the rural subsistence economy, based on individual landholdings and accounting for 85 percent of Tibetans in the TAR (2000 census), and the urban modern economy, based largely on government administration, services, military, construction, and increasingly, tourism.

-Once the effects of inflation are taken into account the rural economy has been largely stagnant throughout the 1990s, contributing little to the rapid growth experienced since the mid 1990s.

-Growth has been mainly concentrated in the urban modern economy or in few large-scale construction projects, such as the railroad which passes through rural areas but has few economic linkages with them.

-Economic growth in these modern areas has been almost entirely driven by subsidies from Beijing. Or, rather, investment and subsidy programs decided in Beijing more or less determine the fate of growth in the TAR.
-For instance, by the beginning of the reform period, which started in 1978, direct subsidies from Beijing to the TAR were equivalent to about 60 percent of the TAR economy. This proportion slowly fell up to the mid 1990s to about 45 percent, during which time, the TAR economy as a whole was effectively in recession once inflation is taken into account.

-Various development strategies for the western PRC adopted since the mid 1990s have led to the proportion of direct subsidies and investment to gross domestic product (GDP) edging up and stimulated rapid growth in the TAR from 1995 on.

-The TAR has been since achieving some of the highest provincial growth rates in China, mostly concentrated in urban areas or in large-scale construction projects.

-Average urban household incomes in the TAR were the seventh-highest in China among thirty-one provinces in 2001, average rural incomes were the lowest in China in the same year, even lower than those of Guizhou, the poorest province of China in terms of GDP per person.

Growth in Tibetan Areas outside the TAR

-Due to its politically sensitive status, the TAR is much more heavily subsidized than the other [Tibetan] areas. The Tibetan areas outside the TAR receive subsidies via their respective provincial capitals (i.e., Xining, Lanzhou, Chengdu, and Kunming), which are considerably poorer than Beijing and are themselves recipients of central government subsidies.
-In this sense, local governments in the Tibetan areas outside the TAR find themselves at the bottom of a fiscal hierarchy that is much more austere and with any more levels of intermediation than area faced by the TAR.
-Nonetheless, whether great or small, mostly relate to the modern economy, that is, urban areas, construction projects, and so forth, whereas most Tibetans outside the TAR are as rural as those in the TAR, if not more rural.

Who is Benefitting?

-Conditions in Tibetan rural are as are more or less independent of the relative intensity of subsidization in each province. Thus, the rural areas of the TAR can be taken as representative of the experience of most Tibetans in other Tibetan areas.
-There is a 15 percent to 85 percent split among Tibetans in terms of those who are riding the subsidized boom and those who are struggling in the margins.
-This split does not follow the urban-rural divide, because more than one-third of the permanently resident adult city population in the TAR (mostly Tibetan) was illiterate in 2002, an exceptionally high level in urban China, with no parallel in any other province.
-The 85 percent with no education or only primary education are possibly making a bit more money in petty trade or unskilled labor, yet they are also faced with the inflationary pressures induced by subsidies, urban affluence, tourism, and so forth.
-Inflation in the TAR was the highest in China, whereas the prices of the main commodities produced by Tibetan farmers and pastoralists have fallen sharply over the same period.
-For every example of a family that has been enriched by current policies, there might equally be one that has been impoverished, whether because of mounting tuition fees or hospital bills, or loss of employment due to some shift in the economy away from certain sectors or regions.

The Challenges for Tibetans

-Therefore the current challenges of development in the TAR are found in this polarization of the economy and its exclusionary dynamics, that is, the marginalization of large majority of Tibetans from participation in and benefit from the dynamic sectors of the economy.
-These challenges are further exacerbated by the presence of Han and Muslim Chinese migrants in the cities and towns, who arrive from much more competitive conditions elsewhere in China, with better connection and with much higher levels of education on average.
-With each passing day, the majority of Tibetans are faced with increasingly mounting barriers to take part in the economic boom.

Fisher, Andrew, “Economic Development”, in Blondeau, Anne-Marie and Katia Buffetrille. Authenticating Tibet: Answers to China’s 100 Questions. Berkeley: University of California Press, 2008.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s