China will continue to cope with the imbalanced development of its coastal and hinterland regions, a senior official with the National Development and Reform Commission (NDRC) said on Friday at the Summer Davos in Dalian.

Zhang Xiaoqiang, vice minister of the NDRC, said the Chinese government will continue to use policy leverage to narrow the gap between different regions.

"The overall development in the central and west regions, particularly in service sector, has lagged far behind that in the east," Zhang said at the Inaugural Annual Meeting of the New Champions hosted by the World Economic Forum.

China initiated the western development strategy in 2000, and has been offering incentives and preferential policies to encourage foreign investment in the west, but the investment into these areas only accounts for about ten to 12 percent of the total foreign investment in the country.

Chinese Premier Wen Jiabao said at the opening session of the Dalian meeting that the government will give stronger support to rural and other underdeveloped areas, speed up the development of social programs, and gradually reverse the widening gap between agriculture and industry, between town and country, and among different regions so as to ensure coordinated economic and social development.

"Apart from setting up policies and creating the legal environment, China will invest more to improve the infrastructure and public service in the remote west," Zhang said.

The government input in the infrastructure of the central and western areas has been gradually increasing. The government will earmark 100 billion yuan from 2006 to 2010 to renovate countryside roads. About 90 percent of the fund is planned for the central and western areas.

Meanwhile, the central government has increased spending on education and health in the underdeveloped provinces and regions.

"In a certain period to come, top priority will be given improving the infrastructure in those areas, including energy, transportation, electricity, health and ecological environment," Zhang said.

The provinces need to seize the opportunity of global industrial restructuring to attract labor-intensive industries. Larger cities can seek opportunities to develop the service sector, Zhang added.

(Xinhua New Agency September 8, 2007)