Many countries, including China, have been facing the challenge of developing their inland regions, especially those close to the border. Due to geopolitical concerns or lack of access to key markets and resources, these regions' growth fails to keep up with the rest of the country. It takes a great deal of wisdom and courage, both at the central and the municipal government level, to reverse this situation.

Guangxi, China's southern autonomous region that borders Vietnam, where the country's largest ethnic minority group (Zhuang) lives, has been making great efforts in tackling its development challenges with the support from the central government.

As one of China's eight provincial-level regions that share borders with neighboring countries, Guangxi has made remarkable economic achievements, but the quality of the growth has yet to be improved. In 2017, its gross domestic product reached 1.85 trillion yuan (268 billion U.S. dollars), ranking the second among all of China's cross-border regions, after Liaoning Province.

Since its establishment as an autonomous region in 1958, Guangxi has maintained an average compounded growth rate of 11.2 percent, slightly higher than the national average of 10.9 percent.  And its share of the national gross domestic product increased from 1.9 percent to 2.3 percent. 

Statistical reasons can hardly explain the underperformance in per capita terms. Guangdong, the neighbor province in the east, has a population 129 percent larger than Guangxi; however, its GDP per capita and the residents average disposable income is 93 percent and 66 percent higher respectively.

The first reason for the underperformance is the delay of export-oriented economic development in an unfavorable geopolitical environment. During the periods of border tensions with Vietnam in the late 1970s and early 1980s, Guangxi's gross domestic product only grew around eight percent compared with over 10 percent elsewhere in China. 

The bilateral relations improved since the 1990s and investment started to pick up after both countries signed a series of agreements on the territorial waters and the Guangxi Beibu Gulf Economic Zone in 2008. The normalization, however, came a little late for Guangxi, who lost at the starting line. Among the 11 coastal provinces and regions, Guangxi ranks only number nine in foreign trade in 2017. 

Secondly, the disadvantageous population structure and growth has been weighing on the local economy. Guangxi has 48.85 million population by the end of 2017, with a mere 0.25 percent natural growth rate per year during last 10 years, while Guangdong and Yunnan, the neighboring provinces on the east and west, recorded a growth of 1.56 percent and 0.63 percent respectively. Obviously, working labor force has been flowing out. 

Therefore, more people under the age of 15 and over 65 are left at home, pushing the dependency ratio (non-working age population to working-age population) to 47.06 percent in 2017, one of the highest level in the country. 

Finally, the urban fixed investment remains below average and thus the urbanization process, the critical driving force of economic growth, is relatively slow. Guangxi's capital formation ratio in 2017 was 50.56 percent, about 19 percentage points lower than the Guizhou province. And people living in towns account for 49.21 percent of the local population in 2017, nine percentage points lower than the national level. 

To catch up and become a regional economic center, Guangxi needs to adopt a differentiated strategy. Utilizing its geographical location and current geopolitical advantages is very important. Guangxi, which has three major ports in the Beibu Gulf and the most convenient shipping routes to the Association of Southeast Asian Nations (ASEAN) countries, and developed inland transportation network, is an ideal gateway on the Maritime Silk Road to Southeast Asia. 

China's trade tension with the U.S. prompt the country and ASEAN to cooperate more closely and all parties concerned will be more willing to participate in peaceful development in the South China Sea. Currently, China's foreign trade with Vietnam, Thailand and Myanmar is already over 213 billion U.S. dollars. Guangxi must mobilize all available resources to grab this historic development opportunity. 

Furthermore, utilizing the abundant natural resources smartly could make Guangxi more competitive as a commodity supplier. Guangxi is a large producer of timber, pine resin, tungsten oilseed, sugar canes, and oranges. Improving varieties and quality, renovating the processing industries concerned would strengthen its position in the supply chain. 

Finally, fiscal support and an accomdating policy from the central government is also essential. 

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