A senior cabinet official has said that China will continue to invest huge sums into its western region over the next five years to develop it into a magnet for both domestic and overseas investors.

The money will be used to build up local infrastructure and improve the environment, said Li Zibin, deputy director of the Office of the Leading Group for Western Region Development at the State Council.

"We need an additional five years to turn western China into an ideal zone for investors from home and abroad," he said.

Li, speaking in an interview with China Daily as the country enters the fifth year of its "Go West" campaign, said the next five years are very important to make further improvements in environmental protection, communications and poverty relief in western China.

Western China offers rich natural resources and a cheap labor supply.

Vice Premier Huang Ju recently said that the western development strategy would remain one of China's top priorities. During an inspection tour in the Guangxi Zhuang Autonomous Region at the beginning of this month, Huang urged governments at all levels to continue to speed up economic and social development there.

China initiated its western development strategy in 1999 to help the underdeveloped area -- which includes 12 provinces, autonomous regions and Chongqing Municipality -- catch up with eastern China.

The western half of the nation's territory is home to one-fourth of its population and produces about 65 percent of the nation's total average gross domestic product.

Policies such as high governmental investment, preferential tax rates and flexibility have gradually paid off, with the average annual GDP growth rate reaching as high as 10 percent during the 2000–04 period. In 1999 it was just 7.2 percent.

About US$10 billion in foreign direct investment has poured into the western region during past five years, with such Fortune 500 behemoths as Toyota, Motorola, Shell, BP and General Motors making their presence felt. A total of 10,000 businesses from China's eastern and coastal regions have also invested there.

Li said that by 2007, all students in the region should have access to nine-year compulsory education and about 20 million rural people living in absolute poverty will have basic food, clothing and shelter.

The Tibet Autonomous Region is one of the primary beneficiaries of the Go West campaign.

The central government will invest 6.4 billion yuan (US$773.5 million) this year in 24 key projects in Tibet, according to the local government. The figure is six times the autonomous region's annual fiscal budget and about one-third of its annual GDP.

About 5.3 billion yuan (US$640.4 million) will be spent on pasture construction, rural clean water projects, rural medical services, education and transportation.

The central government invested 500 million yuan (US$60.4 million) in 1985, the 20th anniversary of the founding of Tibet Autonomous Region; for the 30th anniversary that figure shot up to 4.6 billion yuan (US$555.8 million).

(China Daily January 17, 2005)