Policy Watch

Massive boost for West China

(China Daily)
Updated: 2010-07-07 07:53

BEIJING - The central government has said it will invest more than $100 billion in 23 new infrastructure projects in the underdeveloped western regions this year to boost domestic demand.

The plan was announced on Monday after Premier Wen Jiabao said the Chinese economy is facing an "extremely complicated" situation and two purchasing manager surveys showed manufacturing activity had slowed in June.

The 682.2 billion yuan 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.

Construction will start this year to "actively expand domestic demand and promote the fast and healthy development of the western areas", the top economic planning agency said.

The areas include Northwest China's Xinjiang Uygur autonomous region, North China's Inner Mongolia autonomous region, Southwest China's Tibet autonomous region, and Sichuan and Yunnan provinces.

The country has long sought to boost development in the poor western areas. It spent 2.2 trillion yuan on 120 major projects between 2000 and 2009, the statement said.

At a conference running from Monday to Tuesday in Beijing, President Hu Jintao said the following decade is the key period for further developing the country's vast western regions.

He said despite tremendous progress, the western regions still lag behind the eastern areas.

In 10 years, the western regions should be built into the country's bases for energy resources, resource processing, equipment manufacturing and for the country's emerging industries of strategic importance, Hu said.

Vice Premier Li Keqiang said at the meeting that turning to the vast region and market is a strategic move. It would increase domestic growth and transform the national growth mode.

Hu said that over the coming 10 years, the living standard for people in the western regions should be greatly improved and the environment better protected.

To achieve these goals, Premier Wen said favorable taxation policies would be adopted for certain enterprises in the western regions.

He said the resource tax on coal, crude oil and natural gas will be levied according to price, instead of quantity, in the western regions - a change expected to significantly increase local governments' tax revenues.

The central government will also invest more to help the western regions improve public services, such as education, healthcare, social security and poverty alleviation, Wen said.

China Daily-AFP

(China Daily 07/07/2010 page3)