IN its drive for economic progress, China has tried injecting an economic factor into every activity possible, including art. The Fourth China Art Festival, a tri-annual national cultural event, kicked off yesterday in Lanzhou, capital of northwestern Gansu province. In addition to the promotion of China's art development, the festival, the largest ever held in Gansu, should also enhance the prosperity of the ''great northwest'', Chen Changben, Vice-Minister of Culture, said yesterday. Besides the 45 cultural performances, there are trade fairs on industrial and agricultural products and economic and trade talks with businessmen from other provinces as well as Hong Kong and Taiwan. ''More emphasis should be put on Gansu because it is located at the centre of the country. Its development will spearhead the development of the whole northwestern area,'' said Mr Chen, also a vice-chairman of the festival's organising committee. Top Chinese leaders have repeatedly stressed the role that the region's vast natural resources could play in the country's economic development. Mr Chen quoted Li Ruihuan, a member of the standing committee of the Politburo of the party's central committee, as saying that ''China's hope lies in the great northwest''. ''Land resources in other parts of China are rapidly reducing. But in the northwest, a huge quantity of land, water and other sources of energy remain unexplored,'' Mr Chen said. Mr Li and Li Tieying, another Politburo member, arrived in Lanzhou early this week to officiate the opening of the festival. Despite the importance Beijing has attached to the 10-day event, it has contributed only seven million yuan (HK$6.29 million) for the festival - about one-eighth of the total cost. Gansu - dwarfed by its coastal counterparts in economic development and one of the poorest provinces in China - has to shoulder 16 million yuan alone. Despite its rich natural resources and small population, Gansu has a high number of poor people. Of the total 23.45 million people, about five million were still living on an annual income of 300 yuan, said Zhang Tianli, a member of the standing committee of the Gansu People's Congress. The lion's share of the cost has come from business and individuals in Lanzhou. According to festival organisers, enterprises and individuals have contributed 11 million yuan. For example, the Huaxing Electronic and Machinery factory, a state enterprise in Lanzhou which has a mere net surplus of 450,000 yuan last year, has donated about 13,000 yuan to the festival. Vice-director of the factory, Chai Yangyu, said the surplus could not even cover medical and other expenses to the 1,000 factory workers. Mr Chen argued that the seven million yuan from Beijing was enough for the festival, while investments in infrastructure such as roads, venues and telecommunications would serve the long-term interests of the province. He added that the fifth arts festival would be held in Beijing in 1997 to mark the resumption of sovereignty over Hong Kong. Mr Chen said the 1997 festival was likely to be held one month after the hand-over.