(Yicai Global) Dec. 3 -- Inner Mongolia has witnessed dramatic changes in its economy in the past 40 years since China's reform and opening-up began.

The gross domestic product of the Inner Mongolia Autonomous Region last year was 74.2 times that of 1978 calculated at constant prices. That's an annual average gain of 11.7 percent and 2.2 percent faster than the national figure.

Its GDP growth was quicker than the national average for 21 straight years from 1996 to 2016, per data from the region's statistics bureau. It ranked first among Chinese provinces, regions and cities for eight straight years from 2002 to 2009 in what is known as the 'Inner Mongolia phenomenon.'

Abundant resources have powered the region's GDP growth to rank it first for eight straight years and its burgeoning other aggregate indicators have stood firmly in China's front rank since 2000. Inner Mongolia has had the swiftest regional economic growth in China in the 21st century, Prof. Zhao Haidong, deputy dean of the Graduate School of Inner Mongolia University, recently explained.

The region's heavy chemical industries have ballooned over the past 40 years, as typified by coal energy. It has formed a complete industrial system, and automobile manufacturing, photovoltaic power generation and electronic equipment production are emerging industrial sectors. 

The output of strategic up-and-coming products has also been on the rise. Inner Mongolia's production capacity of coal, rare earth compounds and coal-to-liquids, installed capacity of power plants and power supply all ranked first in China last year, and the cloud computing sector's scale likewise stayed number one.

The rapid growth of heavy chemical industries has skyrocketed per capita GDP to 53.5 times over that of 1978 calculated at constant prices, up 10.8 percent annually on average. Its per capita economic aggregate rose from 17th in 1978 to ninth place by last year.

Income Lag

The actual incomes of locals trail its rapid GDP growth, however. Provinces focusing on heavy industries rely on investment and energy consumption and major investors are central and large state-owned enterprises, Ding Changfa, an economics professor at southern Xiamen University, explained to Yicai Global, adding that the output value of such a model is very large, yet the ordinary Jane and Joe gain but little from it.

China's shift to high-quality development from high-speed growth has dramatically affected the expansion of its leading traditional energy and resource-based industries. The region's economy has been on the wane in recent years after undergoing rapid growth.

Inner Mongolia has therefore striven to promote the emerging sectors of new energy, new materials, energy conservation and environmental protection, high-end equipment, cloud computing and big data, biotechnology, and Mongolian-style traditional Chinese medicine. 

It plans to build more than 120 CNY100-million-plus (USD14.4-million) big data projects this year in a bid to become a hub in North China, per media reports.

It will also seek to increase its emerging industries' share of GDP to about 10 percent in 2020 and make emerging areas a new economic engine, per the region's plans.

The income structure of urban and rural residents in Inner Mongolia has changed in recent years from a high proportion of one single income source to a common growth of diversified sources. The income gap between urban and rural areas, regions and residents has narrowed, and income distribution has greatly improved. 

The per capita disposable income of the region's urban residents was CNY35,670 (USD5,125) last year, up from CNY26,000 in 2013.

Editor: Ben Armour