Although the country's inland areas are catching up in economic growth, experts have warned them not to blindly follow the coastal region's well-worn export-led path, Zheng Yangpeng reports

As US management scholar Peter Drucker once said, we don't have to imagine what the future will be like; the future begins right now, and you can see it if you are observant enough.[Offshore Company Incorporation]

Taking a look at the growth pattern of all regional economies in China in 2012, one can spot emerging differences.

It is easy to see that central and western regions are generally growing at a much faster rate than the more industrialized regions along the eastern coast.

When making a comparison between one coastal province and another, one can also find some changes that have never been clearer.

The GDP figures in the first three quarters show that 24 provinces, municipalities and autonomous regions exceeded the national average of 7.7 percent year-on-year. Most of them are in central and western China.

The mega-city of Chong-qing led the pack by posting a growth rate of 13.8 percent year-on-year. Even the provinces that reported the slowest growth in central and western China could still be faster than 10 percent, overtaking Shanghai's 7.4 percent and Beijing's 7.5 percent.

The economies of central and western China are still in their early stage of development, which explains why they can achieve such impressive growth records, said Cao Heping, [HongKong Richful  - Hong Kong Company Formation, Offshore Company Incorporation]a professor of economics at Peking University.

"It is a good thing," he said. "But it would be no good if all the central and western regions follow the well-worn track of the eastern regions."

Economic growth should be a "multi-polar" phenomenon in China, "not unipolar".

Regarding the possible lack of differentiation among the most rapidly growing areas, the economist said: "I'm a bit worried."

Take the city of Wuhan as an example. The capital of Central China's Hubei province owes its rapid economic growth in recent years primarily to the many new construction projects that are usually categorized as fixed-asset investments, said Peng Zhimin, an economist at the Hubei Academy of Social Sciences.

But across central and western China, most cities are dependent on large fixed-asset investment projects as the main driving force of their economic growth - from new airports and high-speed railways, to new business and commercial districts.

A study of five-year economic programs in central and western China shows that many of them have a similar list of development priorities.

Nearly all have pledged major efforts regarding the same seven "strategic emerging industries" as defined by the central government.

In the central part of China, four provinces - Henan, Hubei, Anhui and Jiangxi, adjacent to one other - have listed automaking as a regional pillar industry.

Even in the design of local buildings, cities tend to copy the landmarks of Beijing or Shanghai.

Cao said what surprised him in his research of regional GDP growth was that there are not only similarities in the speed of growth, but also in many characteristics.

"The underlying logic is that the central and western regions are basically copying the industries along the eastern coast. Their similar growth rates are but an outcome of their fundamentally identical industrial structures."

These similarities are attributed to two inter-related factors. One is encouragement from the central government, [HK Corporate Registration]which is part of its overall emphasis on GDP growth. The other is local governments' preference for capital-intensive, or expensive investment projects, because they tend to generate higher GDP growth figures than business activities in a market economy.

Such a single-minded pursuit of GDP growth must be redressed, Cao said, to ensure there is "a greater diversity of regional development efforts". And officials' performance must instead be "measured by a variety of standards".

Local governments' pursuit of capital-intensive projects is dangerous, warned Zhang Monan, a researcher with the State Information Center. Once they drain government coffers, these projects can easily encounter problems and affect the whole country's financial state.

Local government debt, according to China Credit Rating Co Ltd, reached 580 billion yuan in mid-November, an increase of 150 billion yuan year-on-year.

What so much debt results in, Cao pointed out, is industrial overcapacity and a waste of valuable resources. It would be against basic economics, and certainly be no way to develop a region's comparative advantage, to let all regions develop similar industries equipped with similar technologies.

Can any central and western region eventually catch up with eastern regions by following such a "me-too" strategy? Peng, the Wuhan-based economist, does not think so.

For example, the growth rate of Guangdong province, the nation's economic powerhouse, was 7.9 percent in the first three quarters of 2012, which amounted to 321.4 billion yuan.

Whereas Central China's Henan province, which has almost as much land and people as Guangdong, grew 10 percent over the same period. But in absolute terms, this increase was worth 217.7 billion yuan.

This means that, despite Henan's faster growth, the gap between the two provinces has actually grown, Peng said.

Understandably, recasting a region's economic model is a long and sometimes painful process. But there are silver linings, and East China's Zhejiang province may be one of these.

In the first three quarters of the year, as Zhejiang's GDP grew 7.7 percent year-on-year, its service industries grew 9.2 percent and contributed more than 4 percentage points to GDP growth, according to the provincial government.

Investment in Zhejiang's service sector, excluding real estate development, surged 32.7 percent year-on-year, whereas the latter, due to the restrictions imposed by the central government, was suffering a setback in sales and prices.

Even with real estate development included, investment in Zhejiang's service sector still managed to increase 27.3 percent.

What happened in Zhejiang is remarkable, said Zhuo Yongliang, director of the Zhejiang Provincial Development and Reform Research Institute, because in most other provinces, real estate investment tends to grow much faster, instead of slower, than the general service sector.

Zhejiang's service sector, and its entire economy, may seem to be shedding the model of real estate-led growth ahead of the rest of China.

Zhejiang's service sector revenue also registered faster growth of 9.2 percent year-on-year in the first three quarters than the 6.8 percent notched up by its manufacturing sector during the same period.

In some other coastal provinces, in contrast, the manufacturing sector continued to play a dominant role in the local economy, despite domestic overcapacity and fewer overseas orders.

In Zhejiang's neighboring Jiangsu province, the manufacturing sector grew 11 percent in the first three quarters while the service sector grew only 9.4 percent.

And in Shandong province, manufacturing grew 10.7 percent while the service sector grew 9.3 percent.

Zhejiang's advantage, according to Zhu Huasheng, associate professor of economics at Beijing Normal University, can partly be explained by the clusters of private enterprises in its different cities.

Zhu noted that the majority of the enterprises in Zhejiang, especially those in the south of the province, are privately owned.

"So they are very sensitive to market signals. And once their products are seen as not being competitive enough, they can change their production strategy almost overnight."

Through the process, companies in each city in Zhejiang have developed their comparative strengths and niche products.

For example, while companies in northern Zhejiang's Ningbo are good at competing in the men's apparel market, those in southern Zhejiang's Wenzhou mostly specialize in the production of men's leisure wear, Zhu said.

Of course, amid private enterprises' ceaseless metamorphosis, some have decided to become more service-oriented, and even to become fully fledged service companies.

Zhejiang is the home of Alibaba Group, which owns the country's largest e-commerce and online payment platforms. Over the years, many e-commerce and logistics companies have appeared in Zhejiang.

That means that the largest variety of shirts, shoes and indeed nearly all daily goods is available to many Chinese consumers with a click of a mouse in a virtual world owned by Zhejiang businesspeople.

Nationally, online shopping transactions were equivalent to 3.3 percent of retail revenue in 2010, and roughly 4 percent in 2011.

Alibaba Group, which occupies more than 50 percent of China's online shopping market, claimed 19.1 billion yuan in total sales on its all B2C/C2C platforms on Nov 11, a major shopping day for urban youth.

While in comparison, in October, the national retail volume was nearly 1.9 trillion yuan, or 61 billion yuan daily.

Alibaba's dominating market strength is certainly unique. It did not come from building roads, railways or airports. It does not even cause traffic jams. The problem, experts say, is that this cannot be replicated by other provinces.