Thirty-one years ago, Gao Wenming left his village in mountainous Luanping county to find a job in the brickyards of Beijing's suburbs, only three hours away.

Today, the capital is still a destination for Gao and many of his neighbors, for although there have been dramatic changes outside of his native county, little has changed inside.

Residents in his village, Gaowopu, still live in houses similar to the one Gao's father and grandfather lived in, with most still getting by on an annual income well below the national poverty line of 2,300 yuan ($370).

In contrast, residents of neighboring Miyun county, in Beijing, had an average income of 11,857 yuan in 2010.

Many villagers in their 60s still have to work on construction sites in the capital to make ends meet, Gao said.

According to a study released by the Beijing Urban Development Research Institute in November, the 14 counties in Hebei province that surrounds Beijing, including Luanping, Chicheng and Laishui, lag far behind their big-city neighbor in terms of infrastructure and income.

Today there are about 200 so-called poverty villages, home to 1.54 million people, in Hebei, the study stated.

Since 2010, authorities have been looking at new ways to boost the prospects of these areas, and on April 6, senior officials from Beijing and Hebei met to discuss plans for a "capital economic circle".

However, as experts in urban and rural development have pointed out, many natural and man-made obstacles remain on the road to prosperity.

While a young girl watches, villager Tong Lin sews a cushion in front of her adobe house in Fuhe village, Guyuan county, Hebei province, in August. Although it is one of the counties encircling Beijing, Guyuan lags far behind its big city neighbor in terms of infrastructure and income. Gong Zhihong / Xinhua

Poverty zone

"Before the country's reform and opening-up policy in 1978, the 14 counties were basically at the same level of development as the suburban counties of Beijing, like Miyun and Yanqing," Hu Shuanglong, director of Hebei's poverty alleviation and development office, said in an article in 2007.

Hu listed three major reasons behind the region's poverty: poor natural conditions, including mountainous terrain, barren land and frequent droughts, the lack of fiscal support from the central government, and poor infrastructure development.

Hu also noted that policies relating to Beijing greatly affected Hebei and differentiated its poverty zone from others in the country.

These areas are sources of water supply to Beijing and Tianjin and are also important to the environmental protection efforts of both cities.

The national policy of restricting the region's development in order to protect water sources and the environment is "an important factor for the poverty issue in the region", says the study by Beijing's urban development research institute.

Chengde city, for example, spends 350 million yuan a year on water conservation, and has turned away industrial programs that could have earned up to 390 million yuan in profits. Almost 12 percent of land in Chengde has been listed as forbidden zones for development.

In Hebei, however, the lack of any mechanism for compensating residents has also directly affected the region's development, the report concludes.

"As Beijing's neighboring county, environmental protection always takes priority over economic development," said Zhang Yazhong, deputy director of the development and reform commission of Luanping.

Zhang said the county's government has been tempted by offers of heavy industry programs that will create abundant job opportunities and bring in wealth. But each time they consider proposed projects, they face strong objections from Tianjin and Beijing.

Meanwhile, authorities in Beijing are providing subsidies to encourage Hebei farmers to turn their rice fields into corn fields to preserve water resources.

"But the subsidies are not enough to cover losses, as there is a large gap in terms of production between rice and corn," said Deng Xiujun, a former Luanping government official.

The lack of suitable land for agriculture or other development is made worse when environmentally protected areas are set up, Deng said.

Growing gap

The remarkable difference in income and financial resources between Miyun and Luanping counties is being keenly felt by the residents of the latter.

"For the same forestation project in the mountain, they can afford to cover the trees' plantation and subsequent watering," said Wu Liguo, deputy chief of Luanping publicity office. "We can only afford to get the trees planted, and that's it. Whether the trees survive or die, we can't afford further care."

The lack of financial resources of Hebei's local governments has held back improvements to the infrastructure of the region.

"You get firsthand experience each time you make a trip back home," said Lin Bohu, a migrant worker from Luanping who works in Miyun county.

"The road gets narrower immediately you leave Miyun, and sometimes the asphalt roads disappear altogether."

In Miyun, 200,000 yuan is spent for each kilometer of every village road project. In Luanping, the amount is 35,000 yuan, Wu said.

"I think the difference is beyond comparison," Wu said. "The gap is insurmountable right now."

Guan Dongxu, an official from the development and reform commission of Luanping, said: "The gap between Beijing and neighboring Hebei province is strange if we consider other metropolises, like New York, Tokyo and Paris.

"These cities all have developed areas around them. But in Luanping and Beijing's case, there is sharp contrast in terms of economic development."

Integration

Li Lan, from the research institute affiliated to the development and reform commission of Hebei province, said alleviating poverty should be the focus of a regional cooperation effort, because poverty was closely linked to environmental conservation and economic development.

In 2010, the Hebei provincial government put forward a plan to develop a green economic circle around Beijing, which was also widely viewed as a poverty relief effort.

According to the plan, areas around Beijing will be established as special zones with different bases, including tourist destinations and vegetable supply centers.

Industries moved out of the capital would be designated to these zones.

So far, in Luanping, a metals and high-tech industry park is being built, and a section of the Great Wall is being further developed as a tourist attraction.

Meanwhile, the 12th Five-Year Plan (2011-2015) of China proposes a "capital economic circle", which calls for stronger cooperation between Beijing, Tianjin and Hebei province to boost regional development.

This was the focus of the meeting between senior officials from Beijing and Hebei on April 6.

At the meeting, Liu Qi, Party chief of Beijing municipality, said a better mechanism was needed for cooperation between senior officials and government departments in Beijing and Hebei.

Zhang Qingli, Party chief of Hebei, urged greater regional integration.

However, experts say there are a couple of problems both authorities have to tackle.

Zhang Keyun, a professor on regional economy at Renmin University of China, believes Beijing has only limited influence over it neighboring province in terms of economic development due to its short industrial history.

"It is natural that a city will expand to surrounding areas after reaching a certain stage of development," Zhang said. "But Beijing's case is unique because it had no industries before 1949, when it was chosen as capital."

Chen Zhang, from the Beijing Statistics Bureau, gave a similar analysis in an article in the bureau's Data magazine last year, pointing out that Beijing has a strong demand for resources from neighboring provinces, but cannot provide economic stimulus in return.

Chen believes this also restricts Beijing's development.

In Luanping, however, the effect of the authorities' efforts has yet to be felt by residents, except that real estate prices have soared in the past two years from 2,000 yuan to 6,000 yuan per square meter.

Villager Gao Wenming said he was unaware of any government plans to boost the economy but had heard rumors that Luanping will become part of Beijing in the near future.