Amid a general slowdown in the Chinese economy, Tibet has emerged as the fastest-growing province in the country.
It tied for the top spot with Guizhou—also a relatively underdeveloped and landlocked province—with both regions posting GDP growth of 10.8% in 2014, compared with a national average of approximately 7%.
The main reason for Tibet’s economic boom is heavy domestic investment in traditional industries such as mining and metals, and new industries such as hydro and solar power. Money is also pouring into transport and tourism infrastructure, funding, among other things, new rail lines and airports.
“As China’s economy is slowing, the central government has increased fiscal spending on certain infrastructure projects as a way of stimulating the economy,” says Andrew Labelle, international economist with TD Bank in Toronto.
“There is also a realization that much of the development in China has occurred in coastal regions. As a result, there is an increased effort in further developing some of the inland provinces.”
For example, in Tibet, state-owned China General Nuclear Power Group is investing nearly $3 billion in wind and solar power projects. And new power stations are coming onstream this year, in part to support expansion of the Jiama copper and gold mines.
Beijing hopes these moves will help offset a foreign investment environment that has soured and kept the world’s number-two economy from powering forward. “China is no longer the top priority for firms’ global investment plans,” says Scott Kennedy, a China expert at the Center for Strategic and International Studies in Washington, DC. “The unbridled enthusiasm of years past is over.” He noted that a recent survey by the American Chamber of Commerce in China found that a majority of respondents either have no plans to increase their investment in China or plan to make no more than a 10% increase.