The Development of Western China

In 2000 China started a develop-the-west campaign. The 10 newly-launched major projects, the five key projects in preparation, and the 78 ongoing large and medium-sized projects have made the western region a hot investment spot. According to statistics, in 2000 the capital construction investment in western China was a dozen of percentage points higher than that of eastern China. Starting from 2001 the Chinese government has offered preferential policies to the western region in terms of capital input, investment environment, internal and external opening-up, development of science and education, and human resources. At the same time, an additional 12 key projects has been launched.

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 territory, with a population making up 22.8 percent of the nation’s total. Western China is rich in mineral, energy (including hydropower), tourism and land resources. The eastern China on the lower reaches of the Yangtze River has long coastal lines, totaling 14,000 km， while the western China on the upper reaches of the Yangtze River, bordered by more than 10 countries, has 3,500 km of land frontier lines. Hence it is generally believed that western China will become the second golden area for the opening-up.

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 autonomous regions), and has formulated a sequence of preferential policies and measures for encouraging foreign business-people to make investments there. For instance, the Chinese government has decided that as for the foreign-funded enterprises in central and western China whose development is encouraged, 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 whose products are for export shall be exempt or reduced, with the tax rate being 10 percent at the lowest. In addition, the provinces, autonomous regions and municipality in the west enjoy the limits of authority equivalent to those of the coastal provinces and municipalities, and may approve the foreign-funded projects with an investment of less than US $30 million on their own.