By Wu Fenggang, Department of Macroeconomic Research, DRC

Research report No.100, 2017 (Total 5175) 2017-08-25

Abstract: The experience of the construction of small towns with distinctive local features in Zhejiang Province lies in the fact that based on strong county and community financial power, in the context of its unique fiscal institutional system and relaxed financial environment and guided by the concept of developing distinctive industries plus local culture, Zhejiang Province has attracted innovative personnel and achieved practical results by way of its fine-quality innovation and residential environment. But in light of the local conditions in the central and western regions, their county-level economy is relatively weak, the driving forces of county towns are quite limited and the comparative advantages of key factor costs of small towns are intangible. As a result, it is hard for them to converge advanced productive factors due to the lack of external conditions and internal foundations for developing small towns with distinctive features. If they simply copy Zhejiang experience and develop small towns at a breakneck speed, they would face downward performance of regional economy and local governmental debts and regional resource and environmental risks might also be induced. They need to learn from Zhejiang spirit which focuses on pursuing practical results, follow the general direction of developing urban- and county-level economy, adhere to the market-oriented principles, place top priority on ecological improvement and unfold the development of small towns with distinctive features in an orderly manner and in light of local conditions.

Key words: characteristic towns, PPP model, Zhejiang spirit