The key to regional ethnic autonomy is to speed up social and economic development in ethnic autonomous areas and guarantee minority people's equal rights to development. Over the past 40 years, the Tibet Autonomous Region, under the correct direction and wholehearted support of the state, has fully exercised the decision-making right guaranteed to it by law in economic and social development, and formulated a series of policies and measures suitable for the actual situation in Tibet. This has greatly promoted the modernization drive in Tibet and improved its people's living standards.

According to the Constitution and the "Law on Regional Ethnic Autonomy," the Tibet Autonomous Region has the power, within the framework of the Constitution and law, to adopt special policies and flexible measures according to the local conditions to speed up its economic and cultural development; under the direction of the state plan and in accordance with its local features and needs, to map out its principles, policies and plans for economic development, and decide and manage independently its economic and social development undertakings; to administer, protect and be the first to utilize its natural resources; to administer its own finances and independently arrange the use of its fiscal revenue; to independently develop its educational and cultural undertakings and manage its educational, scientific, cultural, health and physical education undertakings; and to enjoy the state's preferential policies in the aspects of finance, banking and taxation. In the past 40 years, the Tibet Autonomous Region has fully exercised autonomy in economic and social development in accordance with the law, and formulated and implemented 10 Five-Year Plans for Economic and Social Development in light of Tibet's reality. With the leapfrogging of stages of development as the target of economic and social development and the improvement of the infrastructure and the people's living standard as the key, it has independently arranged its economic and social development projects, and has thus guaranteed the rapid and healthy progress of Tibet's modernization drive and the development of Tibet's society and economy in line with the basic interests of the Tibetan people.

In accordance with Tibet's special features and needs, the state has spared no effort to help promote Tibet's economic and social development. The ordinary people in Tibet are the direct beneficiaries of all these support, aid and policies. Considering present-day Tibet being born from the backward feudal serfdom, its weak economic and social foundation and its high altitude, for many years the state has given Tibet special support and help in terms of finance, banking and taxation, as well as materials, technologies and personnel according to the stipulations in the Constitution and the "Law on Regional Ethnic Autonomy." Since the early 1980s, the Central Government has convened four Forums on Work in Tibet according to the needs and requirements of the Region, and worked out a series of special preferential policies and measures concerning the major problems in Tibet's economic and social development. For instance, since 1984 the policies of "long-term household land use and independent management" and "long-term private ownership of livestock and independent management" have been adopted in the agricultural and pastoral areas of Tibet, which have greatly raised farmers' and herdsmen's enthusiasm for production, and brought about sustained improvement in both production and the people's living conditions in the agricultural and pastoral areas. Another example is that Tibet is the only place in China to enjoy a preferential taxation policy at a rate three percentage points lower than in any other part of China, and where farmers and herdsmen are exempt from taxes and administrative charges. In banking, Tibet has all along enjoyed a preferential interest rate on loans two percentage points lower than in any other place in China, as well as a low rate on insurance premiums. Also, farmers and herdsmen receive free medical care, and their children go to school with board and lodging free of charge.

Meanwhile, the state gives special support for Tibet's development in terms of capital, technology and personnel. From 1984 to 1994, a total of 43 projects were undertaken, with a total investment of 480 million yuan from the state and nine provinces and municipalities. Between 1994 and 2001, the Central Government again financed 62 projects, involving an additional 4.86 billion yuan in direct investment; and 716 projects have been financed and constructed with free aid from 15 provinces and central ministries and commissions, involving a total investment of 3.16 billion yuan. At the Fourth Forum on Work in Tibet, held by the central authorities in 2001, it was decided to further strengthen the support for Tibet's development by investing 31.2 billion yuan in 117 projects during the 10th Five-Year Plan period (2001-2005) with funds from the Central Government, coupled with 37.9 billion yuan in financial subsidy. Meanwhile, Tibet will receive aid from other regions throughout the country in the construction of 71 projects, involving a total investment of 1.062 billion yuan. According to statistics, in close to 40 years since the Tibet Autonomous Region was founded, of Tibet's 87.586 billion yuan of financial expenditure, 94.9 percent came from Central Government subsidies. In the last decade, well over 2,000 cadres at various levels have been selected and sent to help with work in Tibet, together with 10.166 billion yuan in financial help in the form of capital and materials (not including the capital involved in the 117 Central Government's aid projects in the same period). The support from the Central Government and other parts of the country has greatly improved the production and living conditions in Tibet and promoted its economic and social development.

In the last four decades, Tibet has progressed by leaps and bounds in the system, structure and total volume of its economy, ending the closed, manorial-system-based natural economy for good and moving forward to a modern market economy. From 1965 to 2003, the GNP of Tibet increased from 327 million yuan to 18.459 billion yuan, and the GDP per capita rose from 241 yuan to 6,874 yuan. A modern industrial system comprising more than 20 categories and with distinctive Tibetan characteristics has come into existence from nothing. Burgeoning industries and trades such as modern commerce, tourism, posts and telecommunications, catering services, entertainment and IT that used to be unheard of in Tibet, are now developing with great momentum. There was no highway in Tibet in the old days, but today a road transportation network has taken shape with national highways and 14 provincial highways as the trunk lines, with more than 41,300 kilometers open to traffic. Construction of the Qinghai-Tibet Railway began in 2001; when it is completed and opened to traffic in 2007, the days when Tibet is not accessible by rail will go beyond recall. In 2003, Tibet received 928,600 visits of tourists from both home and abroad, and the total income from tourism made up 5.6 percent of the GDP in Tibet. By the end of 2003, there were 22 telephones for every 100 people in Tibet, with the total number of fixed and mobile phone users reaching 601,700.

The modernization drive has been developing in harmony with the protection of the environment. Tibet adheres to the strategy of comprehensive, coordinated and sustainable development, integrating environmental protection with modernization efforts by planning and developing them simultaneously, and forming an efficient supervision and control system for environmental protection and pollution control. Attention has been given to ecological improvement, and 18 state- and provincial-level nature reserves have been built, covering 33.9 percent of the region's total land area, effectively protecting Tibet's fragile plateau ecology and the living environment in the urban and rural areas. At present, the ecology in Tibet basically maintains its pristine state, and it is the place where the environment is best protected in China.

The people's material and cultural wellbeings have improved by a large margin. Now, most of the farmers and herdsmen in Tibet have basically solved the food and clothing problem, and some people are now fairly well off. The old Tibet had no school of the modern type, and the attendance rate of school-age children was less than two percent, with 95 percent of young and middle-aged people being illiterate. By the end of 2003, Tibet had 1,011 schools of various types and levels and 2,020 teaching centers, with a total of 453,400 students, the enrolment proportion of primary schools rising to 91.8 percent and the illiteracy rate dropping to less than 30 percent. Since 1985, the Central Government has established Tibetan classes/schools in 21 provinces and municipalities, training up to 10,000 college and secondary technical school graduates.

Medical and health-care conditions have improved markedly. Now, there are 1,305 medical and health institutions in Tibet, with 6,216 beds and 8,287 medical personnel, the number of beds and medical personnel per 1,000 people being higher than the national average. The people are now much better assured of their health than before. Infant mortality rate has dropped from 43 percent before 1959 to 3.1 percent, and the average life span of the Tibetan people has increased from 35.5 years to the present 67 years. Tibet's population has grown from 1.1409 million before 1951 to the present 2.7017 million, of whom the number of Tibetans rose from 1.2087 million in 1964 to 2.5072 million in 2003, making up over 92 percent of the region's population.