An economic development model for the Tibetan society

Otto Kolbl

The challenges facing the Tibetans wishing to engage in business are quite similar to the situation of the Han Chinese farmers a couple of decades ago. All over China, the conditions for expansion of industry and the services sector have been progressively improved. The main requirements are infrastructure and basic education. It should be noted that in the Han areas, many successful entrepreneurs just graduated from elementary school or middle school. For most family businesses, practical skills are much more important than formal education.

However, the development of a certain sector depends on much more than just these two factors; social and cultural factors play an important role. After a short overview of the recent evolution, the development potential will be analyzed below with regards to retail trade and tourism.

Recent development in rural Tibetan areas

The same policies as mentioned above have also been applied in Tibetan areas. The result was the emergence of a class of Tibetan entrepreneurs who have set up businesses in trade and tourism. The effect of the rise in food prices has been even more dramatic in the Tibetan areas, in particular among the high plain herders. The price of meat has increased even faster than the price of cereals and vegetable. Whereas farmers see some of their additional income eaten away by increased prices for fuel, fertilizer and pesticides, Tibetan herders don't need any of this. As a consequence, the rural construction boom mentioned above has also taken hold in the Tibetan areas.

Tibetans building a new house in the traditional style of the region

Another aspect which is especially important in the Tibetan areas is the infrastructure. Roads, mobile phone coverage and even 3G coverage are exceptionally advanced for a region with such a low population density. The Chinese central government has spent huge amounts of money to achieve this, and progress is ongoing. Fifteen years ago, in order to get from Lanzhou, the capital of Gansu province, to Hezuo, the administrative seat of the Gannan Tibetan Autonomous Prefecture, it took 8 hours. Since the completion of the highway from Lanzhou to Linxia half-way, it takes four hours. In one year, when the highway from Linxia to Hezuo will be finished, it will take a little more than two hours.

The highway from Linxia to Hezuo under construction.