China will kick off a new round in its western development strategy for the next 10 years, following an average annual growth rate of 11.6 percent in the past 10 years in the region's 12 provinces, autonomous regions and municipalities, Beijing-based newspaper Global Times reports.

Some analysts note that the country's economy mainly driven by central government investment has led to an expanding gap between the country's western and eastern regions and intense competition between some key western cities. They believe more efforts need to be made to promote western China's ability for self-renewal.

China launched the "Western Development Strategy" in January 2000 to help its underdeveloped western regions catch up with the more prosperous eastern regions. The western regions comprise 12 provinces, autonomous regions and municipalities and have a combined population of about 370 million people.

"It is impossible to solve the deep-seated problems and reverse the lagging situation in such a vast area in a short period of time," Cao Yushu, former deputy director of the Western Development Office of the State Council, China's cabinet, was quoted by Caijing, China's most influential magazine as saying.

Some researchers have attributed the widening regional gap to unbalanced government investment.

Investment in eastern regions stood at 9.64 trillion yuan (US$1.4 trillion) in 2008, while investment in the western areas was 3.59 trillion yuan in the same year, according to a report in the Lianhe Zaobao that quoted official statistics from the local government of southwestern China's Sichuan Province.

The actual gap in investment between the two regions, however, rose to 6.05 trillion yuan in 2008 from 1.19 trillion in 1999, a 508 percent increase, the report said.

Liu Shiqing, a researcher specializing in western development at the Sichuan Academy of Social Sciences, said the country's western regions did not have as many large industrial projects in the past decade as did the eastern regions.

Jia Wen, an associate professor at the School of Economics at Sichuan University, argued that a lack of private investment is another reason preventing China's west, a "sleeping giant," from waking up.

Jia noted that scrambling for limited public resources has led to intense competition between regions in the western part of the country.

"Government investment, rather than domestic consumption, has been the most significant contributor to local economic development," Jia said. "In the meantime, there has been a general lack of an effective mechanism to hold officials accountable in regard to their decisions on investment approvals."

According to Cao, limitations on private investment in infrastructure construction will be loosened in the next 10-year strategy, which will insist on favorable fiscal and tax policies and raise funds for environmental protection.

Li Yining, an economist at the National Information Center, believes that what the western regions should do in the next 10 years is whatever the eastern regions cannot do.

(CRIENGLISH.com February 26, 2010)