Tibet Can’t Kick Its Subsidy Habit

As China’s economy settles into slower growth, President Xi Jinping has been touting the benefits of what he calls the “new normal,” including a more equitable distribution of income and less pollution. But one region isn’t ready to give up on double-digit growth. “We must grow faster,” says Deng Xiaogang, executive vice chairman of the Tibet Autonomous Region, one of the poorest, least industrialized areas in the People’s Republic. “There is a gap between us and the rest of the country.”

For the past two decades, Tibet’s economy has outperformed China as a whole. Its growth has averaged 12.4 percent annually over that period, compared with a national average of about 10 percent and Beijing’s 2015 target of 7 percent. But these statistics are misleading: The Tibetan miracle is the result of massive subsidies that have done little to foster productive enterprises in the territory of 3.15 million people.