Grassroots growth drivers

China's development strategy demonstrates how poverty alleviation, rural vitalization and transport integration can promote long-term transformation

As global growth slows and supply chains continue to reorganize, middle-income economies face a structural challenge: how to sustain long-term growth while ensuring it is geographically balanced and socially inclusive.

Thailand stands at such a juncture. It used to be one of Asia's fastest-growing economies — expanding at 7 to 8 percent annually in the late 1980s and early 1990s, but the growth has averaged lower than 2 percent over the past decade. Economic activity remains highly concentrated, with the Bangkok Metropolitan Region accounting for about one-third of national GDP. Meanwhile, logistics costs, estimated at 13 to 14 percent of GDP, remain higher than those in several advanced Asian economies, reflecting persistent inefficiencies in spatial integration.

Thailand's recent national election has provided policymakers with an opportunity to reassess development strategy beyond short-term stimulus measures. In this context, China's county-level development approach — which is expected to be reinforced under the 15th Five-Year Plan (2026-30) — offers an instructive example of how long-term policy continuity can link poverty alleviation, rural vitalization and infrastructure-led integration.

China's elimination of extreme poverty in 2020, lifting nearly 100 million rural residents above the national poverty line between 2012 and 2020, marked a historic achievement. Yet it did not signal the end of rural policy. Rather, it marked a transition toward institutionalized rural vitalization under the framework known as sannong or the three rural issues — agriculture, rural areas and farmers.

Under successive five-year plans, emphasis has gradually shifted from targeted poverty relief toward income sustainability, food security resilience and county-level industrial upgrading. With more than 1,800 county-level jurisdictions functioning as key development units, China has used counties as bridges linking rural production with urban markets.

Rural per capita disposable income has continued to grow steadily in recent years, contributing to a gradual narrowing of the urban-rural income gap. Crucially, this progress reflects policy continuity. Five-year plans serve not merely as economic road maps, but as coordination mechanisms aligning fiscal transfers, industrial policy and infrastructure investment over multi-year horizons.

The 15th Five-Year Plan is expected to deepen this integration further, strengthening food security, technological upgrading and regional balance. The core lesson for Thailand lies not in replicating specific policies, but in recognizing the importance of long-term institutional stability in sustaining inclusive growth.

Infrastructure — particularly rail — has played a central role in China's spatial integration strategy. By the end of 2023, China's railway network exceeded 159,000 kilometers, including over 45,000 km of high-speed rail, the world's largest such system. Annual rail freight surpassed 5 billion metric tons, underscoring its role in supporting both industrial and agricultural distribution.

The strategic value of this expansion lies in network effects. China has moved beyond building isolated corridors to constructing interconnected rail grids that reduce travel time, lower logistics costs and integrate inland regions into national markets. Rail connectivity supports inclusive growth by reducing transaction costs for agricultural and industrial goods, enabling cold-chain logistics in inland regions, expanding labor mobility between rural areas and metropolitan hubs, and integrating local industrial clusters into national and export supply chains.

Transit-oriented development around railway stations has amplified these effects. When railway hubs integrate logistics facilities, vocational training centers and public services, they function as economic nodes rather than mere transit points. In this framework, infrastructure becomes a structural platform for regional integration rather than simply a transportation project.

Thailand has embarked on rail modernization, including high-speed rail cooperation with China and expanded double-track systems. However, infrastructure investments yield their highest returns when embedded within coordinated area-based development strategies.

With exports accounting for roughly 60 percent of GDP, Thailand has a growth model that remains highly sensitive to external demand fluctuations. Strengthening district-level industrial ecosystems could broaden domestic value-added and reduce excessive concentration in Bangkok. A district-based development framework could link agricultural production with local processing and logistics hubs, promote clusters of small and medium-sized enterprises aligned with regional comparative advantages, integrate vocational education with district-level industrial needs and improve spatial efficiency to reduce structural disparities.

Such an approach aligns infrastructure expansion with productivity enhancement rather than treating transport projects as isolated investments.

China has remained Thailand's largest trading partner for over a decade, with bilateral trade exceeding $130 billion annually. Connectivity cooperation under the Belt and Road Initiative — particularly the China-Thailand high-speed railway linking Bangkok with northeastern Thailand and eventually the China-Laos Railway — strengthens physical integration across mainland Southeast Asia.

Yet the next phase of cooperation could move beyond physical connectivity toward deeper structural coordination. Joint development of agro-logistics and cold-chain systems, knowledge exchange on county-level industrial clustering, digital platforms linking Thai agricultural producers with Chinese markets, and coordinated planning of Mekong subregional economic corridors would further enhance mutual benefits.

As Southeast Asian economies reposition within evolving supply chains, integrating transport connectivity with inclusive regional development strategies will become increasingly important.

China's county-level development strategy — sustained across successive five-year plans — demonstrates how poverty alleviation, rural revitalization and transport integration can operate as mutually reinforcing pillars of long-term transformation.

For Thailand, the post-election policy cycle presents an opportunity to align rail expansion, district-level industry and bilateral cooperation within a coherent strategy of balanced growth. By linking infrastructure with local productivity and regional partnership, Thailand can strengthen resilience while promoting inclusive prosperity.

Nisit Panthamit is an associate professor of economics, the director of the Center for ASEAN Studies at Chiang Mai University and the joint director of the Center for Southeast Asian Studies at the University of Electronic Science and Technology of China. Nitchanat Phengphum is a researcher at the Center for ASEAN Economic Research at the Faculty of Economics at Chiang Mai University. Jiratchaya Namwong is a lecturer in the Department of Thai Language, School of Foreign Languages and Cultures, Chengdu University, and researcher at the Sichuan Provincial Institute of Thai Studies.

The authors contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.