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Western Development Speeds Up in Next Five Years

A senior cabinet official said China will continue to plunge huge investments into western regions over the next five years to develop it into an investment magnet for both domestic and overseas investors.

The money will be used to build up local infrastructure and improve the ecological environment, said Li Zibin, deputy director of the Office of the Leading Group for Western Region Development at the State Council.

"We need an additional five years to turn western China into an ideal zone for investors from home and abroad," he said.

Li made the remarks on the eve of the fifth anniversary of the country's launch of its "go-west" strategy. Western China boasts rich natural resources and a cheap labor supply.

Sources close to the State Council said China's highest leadership will organize a high-level meeting soon to mark the anniversary and highlight its intentions of investing heavily in the region.

Li said the next five years are very important for China to make further improvement in environmental protection, communications and poverty relief in western China.

Vice-Premier Huang Ju recently pointed out that the western development strategy would still be one of China's top priorities.

During an inspection tour in the Guangxi Zhuang Autonomous Region at the beginning of this month, Huang urged governments at all levels to continue to speed up economic and social development there.

China initiated its western development strategy in 1999 to help the relatively backward area, which includes 12 provinces, autonomous regions and Chongqing, catch up with East China.

The vast western regions cover half of the nation's territory and are home to one-fourth of its population, producing about 65 percent of the nation's total average gross domestic product (GDP).

A series of preferential policies, including more governmental investment, preferential tax rates and flexible policies, are included in the strategy. All efforts have gradually paid off and the average annual GDP rate in the area has stood as high as 10 percent during the 2000-04 period. But that in 1999 was just 7.2 percent.

Education improves

Meanwhile, Li said compulsory education and poverty relief endeavors also go well. By 2007, all students in the region can accept nine-year compulsory education and about 20 million rural people stricken by absolute poverty can have basic food, clothing and shelter.

He said business opportunities are huge in the west and the government should try hard to reform the functions to provide better services for investors and create a sound investment surrounding.

Statistics indicate that about US$10 billion in foreign direct investment has poured into the western region during past five years and a total of 10,000 businesses from eastern and coastal regions have invested funds in the region.

He said most corporate giants in the Fortune 500, including Toyota, Motorola, Shell, BP and General Motors have entered the region.

For further expansion and development in the region, a sound legal framework is also essential, said Li, who is also the vice minister of National Development and Reform Commission.

He said China is drafting a law regulating measures and activities in promoting the western region and the law-making National People's Congress Standing Committee has included the legislation in its five-year plan.

(China Daily January 17, 2005)

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