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The Development of Western China

In 2000 China started a develop-the-west campaign. The Chinese government offered preferential policies to the western region in terms of capital input, investment environment, international and external opening-up, development of science and education, and human resources, thus making western China a land of great development. In the four years between 2000 and 2003, construction of 50 key projects was started in western China, involving an investment of over 730 billion yuan.

The western region includes nine provinces and autonomous regions, i.e., Gansu, Guizhou, Ningxia, Qinghai, Shaanxi, Sichuan, Tibet, Xinjiang and Yunnan, in addition to Chongqing Municipality, and covers two thirds of the nation's total area and 22.8 percent of the whole population. Western China is rich in mineral, energy (including hydropower), tourism and land resources. Viewed as a whole, eastern China on the lower reaches of the Yangtze River has long coastal lines, totaling 14,000 km; and the western part of the upper reaches of the Yangtze River, bordered by more than 10 countries, has 3,500 km of land frontier lines. Hence it is believed that western China will become the next golden area for the opening-up.

As the Chinese government is working out an overall plan for the development of the western region (besides the above nine provinces and autonomous regions and one municipality, the development includes also the Inner Mongolia and Guangxi Zhuang autonomous regions), and has formulated a sequence of preferential policies and measures for encouraging foreign businesspeople to make investments there. For instance, the Chinese government has decided that to encourage foreign-funded enterprises in central and western China, within three years after the termination of the implementation period of the existing preferential tax policy, their income tax will be collected at the reduced rate of 15 percent; and that for the enterprises with products for export, their income tax will be exempt or reduced, the tax rate being 10 percent at the lowest. In addition, the provinces, autonomous regions and municipality in the west enjoy the bounds of authority equivalent to those of the coastal provinces and municipalities, and may approve foreign-funded projects with an investment of less than US$30 million on their own.

Presently, Xi'an, the capital city of Shaanxi Province; Chengdu, the capital city of Sichuan Province, and Chongqing municipality have been designated by the Central Government as three key municipal economic zones, functioning as an axis to promote the development in the whole western area. In 2002, the Ministry of Science and Technology approved a program for establishing the first state-level new- and high-tech industrial development belt of western China in Shaanxi Province. In accordance with the program, the "Silicon Valley of Western China" will integrate four national development zones, three provincial-level development zones and several dozens of industrial gardens and scientific and technological gardens on the Guanzhong Plain in Shaanxi Province, with the Shaanxi section of the Longhai (Lianyungang-Lanzhou) Railway as the axis. These sites will serve as bases for new- and high-tech industries, such as electronic information, software, biomedicine, aeronautics, astronautics and new materials. They also will further promote the development of the relevant scientific researches and industries and accelerate the economic development of the surrounding areas.

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