Information on Development of the West
State Development Planning Commission
People's Republic of China
(May 18, 2000)
I. The main responsibilities and working priorities of the Office of west development
In order to carry out important and strategic decision, made by the party central committee with Comrade Jiang Zemin at the core, to implement the great development of the west and speed up the development of central and west areas and strengthen the organization leadership for west development, the State Council established the leading group on development of the west in January this year. Primier Zhu Rongji is the leader and Vice Primier Wen Jiabao is the deputy leader of the Group. The members of leading group include the leaders of the concerned ministries of the State Council. Under the group, the Office was set up and separate departments were established within the State Development Planning Commission and they shall take the day to day work of the leading group. The Office for west development was officially established in March this year and has started its operation. Provinces, autonomous regions and municipalities of central and west, especially the west have established leading group and offices for west development. Some provinces and municipalities in the east coastal regions have strengthened organization leadership for east west cooperation and regional development.
The Office of west development has 3 major functions: first to study and put forward proposals on development strategy, development plan, important issues, relevant policies, laws and regulations with regard to west development so as to promote sustained, rapid and healthy economic development of the west. Second, to study and put forward proposals on rural economic development, important infrastructure construction, protection and construction of ecology and environment, structure readjustment, resource development and the arrangement of important projects and organize and coordinate the implementation of the plan for changing arable land into forest and grass. Third, study and put forward policy proposals on deepening of reform, opening wider to the outside world and introducing domestic and foreign capital technology and talent, coordinate the comprehensive development of economic work on the one hand and science, education and culture work on the other.
Based on the instructions of the Party Central Committee and the State Council, the Office of west development will focus on four areas: first, to make an overall plan on west development. Second, to formulate policy and measures for speeding up west development. Third, to speed up infrastructure construction in the west. Fourth, to strengthen protection and construction of ecology and environment in the west.
II. The guiding principles and working content for development plan in the west
The implementation of the great development of the west and speeding up of the central and west development is a huge systematic project and is a tough historic task. The sense of urgency is needed and we should be very active and persist and be prepared for long term hard work. At the current stage, we should study and formulate overall plan for west development.
We should have long term strategic thinking for west development. Through hard work of several generations, until mid of 21st century when China basically realize modernization, a new West will be built. This new West is of economic prosperity, progressed society, national unity, beautiful mountains and rivers, and happy lives. The midterm target of western China development is to work harder to make obvious progress in infrastructure construction, industrial structure adjustment, ecological environment protection, development of science and education in the next five to ten years. This year substantive step must be made so that western China and middle part of China development can have a good start.
The following principles must be adhere to when western China development plan is made: 1. To proceed from the actual situation, to act according to objective law and one's capacity, and to focus on efficiency. Western China development must be planned properly and conducted progressively. 2. To lay stress on key points, and to be aware that there are things must be done and things must not be done. To do things according to time and place, to give full play to advantages, and to link western China development with local economic restructuring. 3. To be far-sighted based on current situation. To find solutions for present problems must be combined with long-term objectives. 4. To stick to making unified planning with due consideration for all concerned. The tasks of speeding up western China development and further developing eastern China and coastal areas must be rationally coordinated so that the west and the east may help each other forward. 5. To consider every possible angle to make scientific planning. Targets, initiatives and policies must be brought into "Tenth Five Year Plan for National Economy and Social Development". 6. To bring every positive factor from society. What western China development needs is not only supports from state and all walks of life, but also self-dependence and hard work of all people in western China.
When formulating plans for western China development, we shall pay attention to current situations and environment of western region, guidelines, principles, overall targets, and strategic actions. There will be geographical areas identified as key areas of western China development, some fields as key development tasks, and policies which are beneficial to western China will be worked out.
III. Direction of formulating policy and measures for western China development.
Western China development needs new ideas, new measures and new mechanism, which can fit into new circumstances. Practical policies especially are needed to be worked out and promulgated in a timely manner so that reform, opening up and economic construction in western China can be carried out speedily. This is an important task of the Western China Development Office.
At present, all related organizations of the State Council are formulating policies and measures, which can help western China development. Referring to suggestions of other parties concerned and taking all factors into consideration, the Western China Development Office is formulating a comprehensive policy program for the purpose of creating positive environment for the implementation of western China strategy and rapid development of the region. Policies of reform, science, technology and education will be given special attention.
Reform and opening-up are key areas in the course of policy-making. To deepen reform of state-owned enterprises, invigorate enterprises and develop urban and rural enterprises of different ownerships including collective enterprises, individual entities, private enterprises and foreign enterprises, so as to gradually make the enterprises as the main entity in western development. Western regions should be more opened to the outside world. People's mind should be changed. We will also improve the investment climate, expand areas that foreign investors can invest, strive for long term and favorable foreign loans, develop export-oriented economy, and expand exchanges with foreign economic technologies. Western areas should be accelerated to the domestic enterprises. Conditions should be created to attract enterprises in eastern areas to invest and bring management skills to western regions. Economic and technological co-operations and joint development in various forms between east and west should be further strengthened.
Policy researches on development of science and technology, effectively employ talented personnel, attract and train talented personnel should be strengthened. Accelerate the application of technologies in western development with focus on the promotion of applicable technologies, pay attention to introduce and digest technologies, and transform these technologies into products. Actively develop technology-intensified enterprises and strengthen technological services.
Further measures should be taken to universalize the 9-year compulsory education, promote higher education, secondary education and professional education in various forms. Joint development between east and west on schools should also be conducted. Actions should also be take to well use of the existing personnel by all means, attract talented persons from outside the region, train persons in different fields at different levels that is of urgent need for western development, and exchanges working staff between eastern and western China.
IV. Favorable policies and climate to encourage foreign investment in western regions
In order to guide foreign investment in mid and western regions, some favorable policies have come out in succession. They include: 1. As for the category A foreign investment projects, as long as they can take the advantages of the western resources and accord with the country's industrial policies, the restrictions can be moderately relaxed. The policy can be referred in "Temporary Regulations on the Guidance of Foreign Investment", which was issued in 1995. 2. In the "Catalogue of Foreign Investment Industry Guidance"(Dec. 1997 Revised Version), conditions for foreign investment projects in western regions were much more relaxed. For instance, those cement projects that have a capacity of 4,000 tons daily can be classified into the category of encouragement; those coal burning power plants with a capacity of 300 MW per unit are classified into the limitation B category, except for remote areas. This policy is actually pointing at the mid and western regions.
In order to coordinate with the western development strategy, the county, since last year, has issued or will issue some preferential polices to encourage foreign investor to invest in China's mid and western areas. The policies are: 1. As for the category of encouragement and category B foreign invested projects in western areas classified by the "Catalogue of Foreign Investment Industry Guidance", after the existing 3-year period for favorable taxation expired, the State Council has decided that those projects can enjoy a reduction of 15% on income tax. And for the export-oriented enterprises with the percentage on export products beyond 70% yearly, 10% income tax reduction can be granted. 2. The State Council has decided to upgrade 7 development zones from local level to the national level, namely, Xi'an, Chengdu, Kunming, and Guiyang in western regions and Hefei, Zhengzhou, and Changsha in the middle of China.
After the 50-year construction, especially the 20 years of the reform and opening up, the western economic strength has been improved remarkably. Economies in Chongqing, Xi'an, Chengdu and Kunming are no worse than that of some coastal cities. What's more, in light of attracting foreign investment, western regions have their own advantages: abundant natural resources, low labor costs, cheap land renting prices, and potential markets.
However, by the end of 1999, the agreed and the real utilization of foreign investments in western regions (Sichuan, Chongqing, Guizhou, Yunna, Shaansxi, Gansu, Qinghai, Ningxia, Xinjian, and Tibet) still accounted for a small proportion of foreign investment of the whole country.
In order to implement the western development, improvement of both soft and hard climate should be accelerated, including ecological environment, people's level of competence, awareness of the market economy, educational level, intensification of talented personnel, experience for utilizing foreign capital, industrial bases, transportation and telecommunication facilities, and attraction of foreign investment into western areas.
It should be noted that the proportion of foreign investment in western regions is increasing in recent years. With the implementation of the western development strategy, the country will invest more and improve the investment climate more. More foreign funds will be attracted by the western region.
V. Ten key projects that will be started this year in the west
While actively working on the formulation of midterm and long-term plans for Western China Development, the Western China Development Office and the State Development Planning Commission have identified after thorough research and investigation "Ten Key Projects" to be started in the year 2000 in western China areas so that Western China Development can be started and the economy of western China can be developed rapidly.
1. Xi'an to Nanjing railway and other five transportation projects
In terms of sectors, there are six transportation projects in the "ten key projects" to be started in 2000 in western China. All these projects are identified after fully considering issues like current transportation situation in western China and social and economic development demand, and they are of great significance in improving transportation facilities and investment environments, and driving economic development in western areas.
(1) Xi'an to Hefei railway (part of Xi'an to Nanjing railway) and Chongqing to Huaihua railway
In spite of the great development made in recent years, there are still problems existing in railway transportation system in western China when compared with that of eastern China, such as unformed railway network, poor availability, low railway quality and transportation capacity. According to the need of western China development and related railway transportation planning, focal points of railway development of western China in some time in future will be expansion of railway network, construction of west-east, internal and external railway passageways. Standards appropriate for the west will be implemented, and proper planning will make transportation capacity ahead of its actual development level. Therefore, two railway projects are chosen to be included in the "ten key projects", they are Xi'an to Hefei railway (part of Xi'an to Nanjing railway) and Chongqing to Huaihua railway (also called Yu Huai railway).
Xi'an to Nanjing via Nanyang railway is a shortcut from northwest to mid-south, and it can be used as both west-east and north-south passageways. Railway transportation distance from northwest to mid-south and east China, and from southwest to east China will be reduced, and structure of railway network will thus be improved. Chongqing to Huaihua railway is of great strategic significance in completing southwest railway network, forming convenient external passageway, and promoting sustained development of local economy and economy of the whole western region.
(2) Western China highway projects (including state highway main lines and state poverty county highway)
Major problems existing in current highway development in western China are small scale of highway network, poor availability, low technical level and quality. Preliminary plan of the overall western China highway development is as follows: 1) Base on properly implementing current planning of state highway main lines, new roads and highways will be built to form major passages which can not only connect west with mid-east, southwest with northwest, and all neighboring regions, but also reach major rivers and sea. 2) Strengthen the construction of main lines within parts of western China, and improve the quality of highway network. 3) Strengthen the highway construction in poverty-stricken areas, further improve the availability of highways. 4) Properly arrange the construction of main highways which connect west China and middle part of China so as to give full play to the transportation system in western China.
According to the overall plan of highway development in western China, state highway main lines project and state poverty county highway project are chosen to be one of the "ten key projects".
(3) Airport projects in western China
At present, a preliminary fully developed airport layout has been made up by cities of Chengdu, Chongqing, Xi'an, Kunming, Ulumuqi, Lanzhou, Guilin, Nanning, Huhehaote as trunk lines. However, apart from Yunnan province, communication hubs have not formed yet in all the other regions. There are few regional airports, and air routes are mainly city-to-city routes. Spoke-and-wheel-like air route network has not been formed yet. Therefore, "communication hub projects, regional airports, air routes structure improvement and high efficiency" are fundamental principles for airport development and construction in western China during the "Tenth Five-Year Plan".
According to the above-mentioned idea, construction of Xianyang International Airport in Xi'an will be started this year, and a regional air network with Shuangliu Airport in Chengdu, Xianyang Airport in Xi'an, Wujiaba Airport in Kunming, Zhongchuan Airport in Lanzhou and Wulumuqi Airport as communication hubs will be built at the same time. By doing this, a spoke-and-wheel-like air route network with major hub airports as its center will be built up gradually.
(4) Elevated light railway in Chongqing (phase I of light trunk from Jiaochangkou to Xinshancun)
Compared with cities in eastern China, infrastructures in many cities in western China are poor, and urban transportation in those cities must be speedily improved.
Chongqing is one of China's municipalities directly under the Central Government. It is also an important city and center of the southwest region and the upper areas along the Yangtze River. However, due to the distinct geographic conditions, the problem of urban transportation structure is serious. The construction of the urban railway system with a large capacity and high speed will mitigate the traffic congestion effectively.
As an initiating transportation project of similar kind in western region, the construction of the Phase I Chongqing light trunk will not only mitigate the congested traffic transportation, but also be of great significance to the improvement of the urban transportation level and the investment climate.
(5) Natual gas pipeline from Sebei of the Chaidamu Basin -Xining-Lanzhou
In light of the natural gas production regions, Chaidamu Basin in Qinghai province is one of the China's regions that are abundant in natural gas resource. Natural gas fields with abundant reserves have been discovered in the eastern and western part of the Basin.
In light of the natural gas production regions, there is severe air pollution in Lanzhou and Xining, especially the smoke pollution emitted from coal burning. Since many enterprises with high energy consumption are concentrated in Lanzhou, the emission of sulfur dioxides and nitrogen oxides has gone far beyond the standard level. It is imperative to improve the energy mix and the air condition by the utilization of clean and high quality energy like natural gas.
Therefore, the exploration and utilization of the natural gas resources in Chaidamu Basin, the gas pipeline construction project from Sebei to Xining to Lanzhou will greatly improve the air quality in Lanzhou and Xining, and at the same time, they will be very significant to the economic development of Gansu and Qinghai provinces.
The construction of the above six projects will dramatically improve the transportation facilities in western areas. They will lay a solid foundation of improving the investment climate in middle and western regions and implementing the western development strategy.
2. Water conservancy hubs in Zipingpu and Shapotou, convert arable land to forestry (pasture), ecological construction and seedlings projects
There are two projects, among the "ten projects", that are related to regional comprehensive treatment and ecological environment.
(1) Water conservancy hubs of Sichuan Zipingpu and Ningxia Shapotou of the Yellow river.
Strengthening the constructions of water facilities in western regions is an important task that is related to the overall development of the West and the improvement of the ecological environment.
Sichuan Zipingpu water conservancy hub project, located in the upper reaches of the Min Jiang River, is a large scale project with comprehensive functions like power generation, flood prevention, and with the main function of irrigation and water supply. The construction of this project will raise the flood prevention standard, in the down stream Chengdu plain, from the flood that can be seen once every 10 years to once every 100 years. The water supply guarantee rate will be improved by 10 percentage points in Dujiangyan areas. That is of significance to the economic development of Sichuan province.
Construction of Shapotou water conservancy hub in Ningxia, located in the Yellow River, can improve the irrigation conditions along the Yellow River in Ningxia, and improve the irrigation guarantee rate and water efficiency in the areas irrigated by the Yellow River. At the same time, the project can add the power supply, facilitate migrants in mountainous areas to quickly shake off poverty and make a fortune, so as to drive a rapid rural economic development in the region.
(2) Convert arable land to forestry (pasture), ecological construction and seedling projects.
To convert arable land to forestry is of significant strategic meanings in the implementation of western development.
The implementation of convert arable land to forestry will effectively improve the ecological environment in western regions, and prevent soil erosion. From the year 2000, pilot projects of converting land to forestry and pasture will be conducted in 13 provinces and regions, like Yunnan and Sichuan in the upper reaches of Yangtze River and Shaanxi and Gansu in the upper and mid reaches of the Yellow River. The planned arable land conversion is 5.15 million mu, and at the same time there will be 6.48 million mu manmade forestry and pasture on wasted land where conditions permit. This project can not only make full advantages of the ecological system, but also actively facilitate the adjustment of the growing structure in rural areas.
Besides land conversion, the central government will, in 2000, arrange investment on comprehensive ecological harness projects in areas where soil erosion is severe and ecological environment is abominable. The projects are important to social and economic development in western regions. Only when the harness of ecological environment is strengthened, and the environment is constantly improved, the abundant natural resources in the west can be fully explored and utilized, the western region will be given conditions to introduce funds, technology and talented personnel, the flood in the mid and down stream of Yangtze and Yellow Rivers can be effectively mitigated, and economic and social development will be promoted. This is the hope for western development, and this is also an important condition to realize the sustainable development of the whole country.
Water conservancy hubs, conversion of arable land to forestry (pasture), ecological construction and seedling products in the western region, stick to the combination of resource development and environmental protection, pursue the integration of the economic, social and ecological results. All of those actions conduct useful probes for the sustainable economic development.
3?The Potash project in Qinghai
The readjustment of industrial structure is the key in developing the west. We must seize favorable time for industrial structure readjustment, utilize market as the orientation, taking into account of the resource characteristics and advantages of each locality, rely on science and technology progress, develop the local economy and advantageous industry that has a good market prospect and nurture the new economic growth areas.
Qinghai province is a poor region in the western part of China. Building large industrial projects is of great political and economic significance to the strategy of developing the west. From the point of view of resource condition in the province, the salt lake is enriched with abundant potash resource, which will not only provide enough resources to the current production capacity and also meet the needs of this project and follow up projects; in terms of market conditions, China's potash production capacity is not sufficient and most of the products need to be imported; with regard to technology conditions, this project utilize the technology developed by domestic entity and proves to be successful in production. Therefore, this project has obvious comparative advantage.
The building of Qinghai potash project is of great significance to its support of agriculture production, driving the comprehensive utilization of salt lake resources and promoting local economic development. It will conduct active experiment in rational development of natural resources, taking advantage of comparative merits and readjusting the industrial structure of the west.
4. The building of university infrastructure in the west
Science, technology and education is the important condition in developing the west. The low conversion rate of science and technology result in the west is, the high proportion of illiterate and half literate population and insufficient supply of specialized talents have severely restricted the economic and social development.
In order to implement the strategy of west development, speed up the nurturing of talents and enhancing the talent quality in the west, on the basis of supporting the basic education in the central and the west, the state decides to utilize the state debt capital to support teaching, lab infrastructure building and reform of socialization of logistics in the universities of the west. This is one of the ten great projects---university infrastructure building project in the west.
This project is of great significance to the increasing of culture and technical quality of the labors in the west, speeding up of the education development in the west and expanding the scale of nurturing high level talented people. The completion of the project will effectively improve the conditions for operating the universities, create good working conditions for science and research staff in the universities, thus promote the standard of science and research in the universities.