The central government must coordinate local governments during the new wave of industry relocation in China to play up the policy’s advantages and avoid negative influences, says an editorial in China Business News. Excerpts:

Premier Li Keqiang presided over a conference of the State Council last week in Beijing. During that conference, he pointed out that governments of inland areas should play up the market’s role in relocating industries, give full consideration to the practical conditions of different areas, open up to foreign enterprises and pay special attention to protecting the environment and saving water.

Relocating industries from coastal area of China to the inland regions helps the coastal areas upgrade their industries and promotes the inland areas’ rapid economic growth. But the fact that the government has played a leading role in the process has created overcapacity, environmental pollution and a serious waste of resources.

Li’s remarks shows that the central government obviously has drawn lessons from past experiences and will coordinate the new round of relocation to rein in the side effects.

First, the central government should encourage its local counterparts to focus on improving infrastructure construction and facilities in transportation, information, telecommunications and energy to provide a better “hardware” environment for the incoming industries.

Meanwhile, the governments in the backward inland areas should improve their working style and efficiency to better serve, not blindly support, the enterprises moving to their regions.

The governments of the inland regions must say no to the polluting and overcapacity industries that would have been weeded out already were it not for the governments’ support.

Second, governments of the inland regions should further open up to international enterprises and foreign investors. The construction of the Silk Road economic belt, a strategy proposed by the Chinese government to boost trade and regional integration, brings a good opportunity to the less-developed areas of China to make a better use of global resources.

Last but not least, the inland areas of China are in the middle and upper reaches of several main rivers. The fragile ecological system poses higher demands for the governments to watch for possible industrial pollution that will come along with the enterprises.

Otherwise, the inland areas of China will go through the old “pollution first, treatment later” story as the coastal areas. But the pollution of western and central China would create a national environmental crisis, given their important geographical and ecological positions in the country.