In 1978, the Chinese government decided to implement a gradual
opening-up policy while setting in motion economic restructure.
Beginning in 1980, China established five special economic zones in
Shenzhen, Zhuhai and Shantou in Guangdong Province, Xiamen in
Fujian Province, and Hainan Province; further opened up 14 coastal
cities, a group of border area cities and all capital cities; and
set up 15 bonded zones, 54 state-level economic and technological
development zones and 53 state new- and high-tech industrial
development zones in certain large and medium-sized cities. The
result is an all-round, multi-level, wide-ranging setup for
opening-up. As these areas adopt different preferential policies,
they have served as windows and played a radiation role in
developing an export-oriented economy, generating foreign exchange
earnings by exporting products and importing advanced
technologies.?
 |
In 2000, China launched its "Develop the West" campaign. The
western region includes nine provinces and autonomous regions,
i.e., Gansu, Guizhou, Ningxia, Qinghai, Shannxi, Sichuan, Tibet,
Xinjiang and Yunnan, in addition to Chongqing Municipality. It
accounts for two thirds of China's total area and 22.8 percent of
its total population. Western China is rich in minerals, energy
(including hydropower), tourism and land resources. Viewed as a
whole, eastern China on the lower Yangtze has a long coastline,
totaling 14,000 km; and the western part of the upper Yangtze,
bordered by more than 10 countries, has 3,500 km of land frontiers.
Hence it is believed that western China will become the next golden
area for opening-up.
As the Chinese government was working out an overall plan for
the development of the western region (the plan also covering Inner
Mongolia and Guangxi Zhuang autonomous regions), it formulated a
suite of preferential policies and measures for encouraging foreign
businesses to invest there. For instance, to encourage
foreign-funded enterprises in central and western China, income tax
will be collected at the reduced rate of 15 percent for three years
following the end of the implementation period of the existing
preferential tax policy, and that the income tax rate for exporting
enterprises will be exempt or reduced to a minimum 10 percent.
Furthermore, the top level governments of the west enjoy authority
equivalent to that of the coastal provinces and municipalities, and
may approve foreign-funded projects with an investment of less than
US$30 million on their own.?
In recent years, China's western region has become a foreign
investment hot spot. Annual investment reached US$2 billion and is
still growing steadily. By the end of 2005, there were 3,000
foreign-funded companies in the western region and some
multinationals had entered logistics, IT, commerce, finance,
insurance and trade, optimizing and upgrading western China's
industrial structure.?