Authorities renew push to develop poor west

PUBLISHED : Thursday, 08 July, 2010, 12:00am
UPDATED : Thursday, 08 July, 2010, 12:00am

A renewed 10-year programme to develop the mainland's vast but poor western region should be more successful than the first go-west programme, launched a decade ago, because the central government is now in a much stronger position, analysts say.

At a conference on the development of the country's west chaired by President Hu Jintao on Monday and Tuesday, the central leadership pledged to spend billions of yuan to speed up economic growth in the region and raise people's living standards. The spending is also designed to bolster social stability in the west, home to most of the mainland's ethnic minorities. Two western autonomous regions, Xinjiang and Tibet , have been hotbeds of ethnic unrest in the past two years.

The economy of the west - an area that stretches from the grasslands of Inner Mongolia to the forests of Guizhou , mountainous Tibet and deserts of Xinjiang - still lags far behind that of the booming east coast, despite significant improvement in the past decade under the government's first go-west campaign, launched in 2000. It aimed to narrow the income gap between the country's neglected interior and its relatively well off seaboard.

This week's central work conference discussed and approved a new 10-year development programme for the west, beginning next year.

As the officials met, the mainland's top planning agency said Beijing would invest 682 billion yuan (HK$782.4 billion) in 23 new infrastructure projects in the west this year to boost domestic demand. It will be used to build railways, roads, airports, coal mines, nuclear power stations and power grids, the National Development and Reform Commission said on its website.

At the conference, Premier Wen Jiabao said the central government would cut corporate income tax in the west and alter resource taxes there. Corporate income tax in western China will be cut to 15 per cent from 25 per cent, and resource taxes on coal, oil, gas and other natural resources will be based on sales prices instead of output.

Professor Wei Houkai , director of the Western Development Research Centre at the Chinese Academy of Social Sciences, said the corporate income tax cut would help attract outside investment, and a change to the way resource taxes were levied would feed more fiscal revenue to local governments in the resource-rich region.

Zhuang Jian , senior economist with the Asian Development Bank, said the comprehensive support policy and vast amount of central investment would result in an economic boom in the region.

Zhang Ming , a professor of political science at Renmin University, said that compared with a decade ago, today's leadership had a stronger political will and more ability to solve the problem.

Hu has recently identified Tibet, Xinjiang and the wealth gap as three issues that must be given top priority by the central government.

Zhang said: 'The recent riots in Tibet and Xinjiang make the political leadership believe it is more imperative to solve the issue.' Xinjiang's Uygurs, like Tibetans, complain they face restrictions on their civil liberties and religious practices.

'Previous governments achieved little in this regard despite their acknowledgement of the problems, because while they had the will, they lacked the weapons to fight the problems,' Zhang said. However, the Hu-Wen administration could be more responsive because it had a bigger war chest due to the past decade's rapid economic growth, he said.

Beijing's leaders have said economic development will remain a key part of the strategy. But Zhang cautioned that an economic boom might not end ethnic strife and ensure social stability if Beijing failed to reform social, political and ethnic minority policies. 'Higher living standards only produce higher demand for political and religious freedom and other civil liberties,' Zhang said.