20000125

China PM urges inland growth push to ease strife

BEIJING: Premier Zhu Rongji has urged China to "lose no time" in developing the country's backward hinterland to boost economic growth, maintain social stability and ease ethnic tensions, the People's Daily reported on Monday.

China will expand investment in the west of the country over the next five years to close a wide wealth gap with the east coast and defuse a key cause of ethnic strife, the mouthpiece of the Communist Party quoted Zhu as saying.

We "must lose no time to push forward the development of the western region," Zhu, who heads a group drafting a blueprint for development of the hinterland, told a January 19-22 meeting of senior government officials in Beijing.

"All government units and regions must unify their ideology and deeds with the Party Central Committee's key strategic decision," Zhu said.

The newspaper said officials at the meeting reached a conclusion that "conditions are ripe" to enforce the policy as part of the state's 2001-2005 10th five-year plan.

The policy would help to expand domestic demand and economic growth, "increase ethnic unity, maintain social stability and reinforce border defences", it said.

When reform architect Deng Xiaoping began freeing the state-run economy and opening China to foreign trade and investment 20 years ago, he concentrated on the more urbanised and accessible eastern coastal regions.

Deng's policy created unprecedented prosperity in an arc of cities stretching from Dalian in the northeast through the eastern metropolis of Shanghai to Guangzhou in the south.

ETHNIC TENSIONS IN WESTERN REGIONS

While China's coastal cities bustle with modernity, western regions have languished, with growth, income levels and other economic vital signs much weaker than in the east.

In 1998, per capita gross domestic product (GDP) in arid Gansu, for example, was just 3,470 yuan ($419), while that of Shanghai, China's richest area, was 28,236 yuan.

And in 1998, western provinces got just three percent of China total foreign direct investment (FDI) of $45.6 billion compared with 87 percent to eastern coastal provinces and 10 percent to central regions.

The western regions are home to restive ethnic minorities including the Turkish-speaking Uighurs in Xinjiang, Tibets, and Moslem Huis in Gansu and Ningxia provinces.

The government believes that spreading the wealth would diminish the separatist appetite of Buddhist Tibetans and Moslem Uighurs in Xinjiang, which has been rocked by bombings, assassinations and riots in recent years.

China's western provinces cover a combined area of 5.4 million sq km (2.1 million sq miles) -- mostly desert and mountains -- accounting for 56 percent of the national total area.

The region has a combined population of 285 million, or 23 percent of China's total. By official reckoning, residents of the hinterland account for 90 percent of the 42 million Chinese who live below the absolute poverty level of $60 a year.

BEIJING TO POUR MONEY INTO HINTERLAND

The People's Daily said China would channel more funds into the construction of highways, railways, airports, natural gas pipelines, power grids, telecommunications, television and radio facilities and water conservation in the hinterland.

"The state would concentrate fiscal power ... to expand the scale of public works investment in western regions," it said.

It said local governments should use market-oriented measures rather than "traditional development means" to develop the interior by absorbing foreign capital, talent, technology and managerial know-how.

The ruling party newspaper called on local governments in eastern areas to "make their contribution" to a systemic programme to help the hinterland reform state-owned enterprises, develop its non-state economy, and expand direct fund-raising for inland-based enterprises.-Reuters