Measures expected to boost west development
(Xinhua)
Updated: 2004-04-02 16:11

China will grant more market access to foreign investors in the development of tourism, mineral resources and high-tech industries in a bid to further boost the vast but poverty-stricken western areas, Xinhua reported.

According to the State Development and Reform Commission (SDRC), these preferential policies aim to attract more investment in unique industries of the area.

A law is being drafted to safeguard development and protect investors' interests legally.

Occupying over 70 percent of the country's territory and boasting 367 million people, China's west suffers from serious problems. Water shortages, poor education and public health facilities and a lack of qualified personnel, have dragged it far behind the affluent eastern coastal regions.

The gap between east and west is still growing. Statistics show that at present, the per capita gross domestic product (GDP) in the west is less the half that of the east, and if it develops at eight percent annually, the west region will take at least 11 years to catch up with the east.

However, the west region has witnessed impressive progress since the central government launched the west development strategy in 1999, especially in the fields of infrastructure and environmental protection.

Eight key projects were completed in 2003, including three road construction projects, an airport extension in Shaanxi Province and four major west-east electricity transmission projects.

Last week, the government issued a document urging a further development of the west, involving 10 major areas such as eco-development, improving farmer's lives, and a series of financial policies to back up the strategy.

"The document not only stretches China's previous strategy on west development, but make variations to tackle the new problems, " said Zhao Ai, an official with the State Council's west development office.

"New policies attach greater importance to improving farmer's lives, such as to fulfill the nine-year compulsory education for children and to improve public health facilities in rural areas," said Wei Houkai, director of the west development and research center with the Academy of Social Sciences, "This is more human-oriented."

The GDP of western areas grew 8.5 percent in 2000, 8.7 percent in 2001, 9.9 percent in 2002 and 11.2 percent in 2003, while in 1999, its GDP increased only 7.2 percent, official statistics show.

"Though the infrastructure and ecological system have been greatly improved in the west, the 'software' for development is still backward, including its technology, education, financial and consulting system, which are all obstacles preventing the capital inflow," Zhao said.

"Far away from the seashore, investments to inland western areas will cost more in transportation, what's more, the region is facing a market with more fierce competition, which the east usually benefits more from," he said.

The document promises long-term and stable financial support for the region, granting more preferential tax rates and flexible policies to encourage non-government investment.

Moreover, the document encourages investment to the unique industries in the area such as tourism and mining.

"Anyway, to an area that has been backwards for thousands of years due to geographical, historical and social problems, it is not realistic to expect it to catch up with the comparatively well-off east region straight-away, so the development of the west is destined to be a long and arduous task," said Wei.

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