Being the most populated municipality directly under the control of Central Government, Chongqing in the southwestern part of China has become an engine for the development of the country's western region.

During an exclusive interview with Beijing Review, Vice Mayor Huang Qifan explained how the municipality could become a financial center for the upper Yangtze River region in the coming years.

Despite being a rich region in west China, Chongqing faces many challenges, including environmental issues and a wealth gap between rural and urban areas, if it is to achieve this aim.

Beijing Review: You are known as the 'financial mayor' of Chongqing as you have long been engaged in economic management. Is it a challenge for you to develop finance in Chongqing and what is your objective?

Huang: To me it's both a challenge and an opportunity. Chongqing is in the western part of China and finance there used to be at a low level, small in scale and poor in quality. So to develop finance there is like drawing a picture on a blank sheet. What is cheering is that after years of our efforts, Chongqing is developing fast and is in good condition.

We have statistics showing that in 2006 outstanding loans stood at 445 billion yuan, an increase of 17.6 percent over 2005, and the region's financial companies have made a profit of 7 billion yuan, which is projected to reach 10 billion yuan in 2007, with a mercantile rate of return hitting 20 percent.

It is this favorable financial developing situation that has lured several foreign banks, including Citibank. Chongqing is rising as a financial center and I believe the municipality will become the financial center of middle and west China.

Many cities are now aiming at becoming financial centers but the country's overall financial resources are limited. What effect will this situation have on Chongqing?

There are different levels of financial center. Shanghai is a state-level financial center now and it is aiming at becoming a financial center for the Asia-Pacific region or even the world. For Chongqing, we first want to be a regional financial center and later, in dozens of years, to be a state-level one.

As a big economic power China should have world-level financial centers, so Shanghai is going for that. The Central Government wants Chongqing to be the financial center in west China, so we will accomplish this mission.

Chongqing suffered a terrible drought last year. Some people say this has much to do with the construction of the world largest dam-the Three Gorges Dam. What is your opinion on this?

I don't think it is related to the Three Gorges Dam. The grim droughts over the past two years mainly resulted from global warming and climate change, which has much to do with the earth's movement and changing global economic patterns. In this sense, I assure you that Chongqing's drought had no connection with the construction of the dam.

It has been reported that many of the people relocated for the dam's construction want to come back home. What do you think of that?

I think the report must have been exaggerated. The Three Gorges Dam needs to relocate 1.13 million Chongqing people and so far we have finished the relocation of 1.03 million, which is 90 percent of the total.

The rest of the people will be relocated in the next three or four years. Among the millions of migrated Chongqing people, 100,000 have moved to the more developed coastal regions, and a mere 5,000 went back to Chongqing, making a tiny 5 percent, an extremely small proportion. And these home-comers returned not because they didn't get along well in the relocated destinations but due to family bonds. It's a normal population backflow and there's no big fuss about it.

Will it be difficult for you to strike a balance between economic development and environmental protection?

It's not a mission impossible to balance economic development and environmental protection. The municipality has land coverage of 80,000 square km and we are thinking about centralizing 80 percent of the population in a 20,000 to 30,000 square km area, which is suitable for human activities and development. Then, we leave the rest of the land for 20 percent of the people. Such a population distribution will prevent the Three Gorges reservoir area from over-exploration and thus keep the region under ecological protection. So you can see that it's not an either-or choice for economic development and environmental protection.