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Building the West Anew
Building the West Anew
UPDATED: January 18, 2010 NO. 3 JANUARY 21, 2010
A Decade of Development
China's interior undergoes a transformation spurred by the government's Western Development Strategy


ELECTRIC LINK: The 500-kv transformer substation in Pu'er, Yunnan Province is a project of the Chinese Government's strategy of developing the western region (WANG XIANG) 

With the adoption of the reform and opening-up policy in the late 1970s, China ushered in a new era of modernization. But while the policies have led to the rapid development of east China, the per-capita GDP of east China is one and a half times the country's average and the region has accumulated a significant amount of capital, talent and technology, development in west China has been comparatively backward.

The per-capita GDP in the west is only two thirds of the country's average and less than 40 percent of east China's figures.

Since the founding of the People's Republic of China in 1949, the country's comprehensive strength has markedly improved, allowing the people to live a relatively comfortable life and the country to become powerful enough to support development in the central and western regions.

In November 1999, the Central Economic Work Conference mapped out the strategy for developing the western region. In January 2000, the State Council put the comprehensive plan in motion, coordinating various tasks for the development of west China.

Implementation situation

Accelerating the development of the central and western regions is a systematic project of grand scale, requiring efforts of people from various ethnic groups in order to gradually narrow the regional development gap and achieve a common prosperity.

The strategic goal of the western development follows a definite plan: By the mid-21st century, when China will realize its overall modernization, the country will be able to reverse the region's backward situation, substantially narrow the regional development gap, and make the western region a place of economic prosperity, social progress, stable living, and ethnic unity with a rejuvenated landscape of beautiful mountains and rivers.

The first 10 years have been crucial to the development strategy, as the country strives to make breakthroughs in infrastructure construction and improvements to the environment, while spurring advancements in science and technology, education, the specialty economy and strong industries. Policies to improve people's livelihoods, a vital part of the strategy, were implemented to lay a solid foundation to further develop the western region.

A series of guiding opinions, policies, and middle- and long-term plans have been launched in the past decade as the Chinese Government strengthens its ties with the region through policy support, financial input, project arrangements and talent exchange.

The government is constantly enlarging its fiscal input in the western region. From 2000 to 2008, Central Government's transfer payments to the western region grew from 108.9 billion yuan ($15.94 billion) to 793.3 billion yuan ($116.15 billion), with an average annual growth rate of 28.2 percent. Within the nine-year period, transfer payments to the western region totaled 3.03 trillion yuan ($443.63 billion), accounting for 43.6 percent of the Central Government's payments to all local governments.

Investments in the western region have also been expanded. From 2000 to 2009, the Central Government allocated infrastructure and treasury funds of 656.5 billion yuan ($96.12 billion) to the western region, accounting for 37.7 percent of total allocated investments. Likewise, construction funds have also been designated for railways and the civil aviation sector in the region.

Additionally, the western region has received a series of preferential tax policies to stimulate growth over the course of the last 10 years. More than 40,000 companies in the western region have received income tax exemptions totaling 189.2 billion yuan ($27.7 billion), with an additional 15.3 billion yuan ($2.24 billion) in exemptions from tariff value-added taxes for imported equipment. The policies have relieved tax burdens, supported technology upgrades and expansions, and added power to the companies' future development. The government also optimized the western region's investment environment, attracting more foreign investment and promoting upgrades to the industrial and product structures.

Government credit support has also been generous. A total of 10.53 trillion yuan ($1.54 trillion) in commercial loans and 860 billion yuan ($125.92 billion) in policy loans were granted to the western region from 2000 to 2009. Similarly, the government has actively promoted the corporate exchange and cooperation between the eastern region and its western partner, with more than 200,000 eastern region companies investing 2.2 trillion yuan ($322.11 billion) in the west.

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