China mulling new policies for western development

Friday June 26, 2009

BEIJING: China plans to unveil a fresh package of policies to drive growth in its vast underdeveloped western regions as the "Go West" policy goes into its second decade, a senior official said on Thursday. Worried by the yawning wealth gap between booming eastern coastal areas and the less developed central and western provinces, Beijing launched the policy in early 2000 to promote development in its interior, giving incentives to invest and work there.

"The current 'Go West' policies will be in force until 2010, so we are working on new policies to further push ahead the development of western regions," Li Yingming, deputy head of the department of western region development under the National Development and Reform Commission, told a news conference. The new set of policies would probably be announced around the end of this year, she said.

Despite the decade of efforts to shift growth inland, and an acceleration of those efforts in the past few years, average incomes in the interior lag far behind those in coastal areas.

For instance, average annual wages among urban workers in western Gansu province, at 20,700 yuan ($3,030), were less than half those in the capital Beijing in the latest published data. Apart from spending more on rural infrastructure and subsidies, the current leadership has abolished the centuries-old agricultural tax, made compulsory education free in the countryside and set up a rural medical insurance scheme. Recently, the central government has allowed local governments to issue bonds for the first time and has given western and central provinces bigger quotas than those in the east.


(Reuters)