In 2000 China started the "Develop the West" campaign. The government offered preferential policies to the western region in terms of capital input, investment environment, international and external opening-up, development of science and education, and human resources, thus making western China a land of great development. In the five years between 2000 and 2004, 60 key projects were started in western China, involving an investment of over 850 billion yuan.


The western region includes nine provinces and autonomous regions, namely, Gansu, Guizhou, Ningxia, Qinghai, Shaanxi, Sichuan, Tibet, Xinjiang and Yunnan, in addition to Chongqing Municipality, accounting for two thirds of the nation’s total area and 22.8 percent of its population. Western China is rich in minerals, energy (including hydropower), tourist and land resources. Viewed as a whole, eastern China on the lower reaches of the Yangtze River has long coastal lines, totaling 14,000 km; and the western part of the upper reaches of the Yangtze River, 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 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, the government has decided that, their 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 in 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. 

Xi'an, capital of Shaanxi Province; Chengdu, capital of Sichuan Province, and Chongqing Municipality have been designated by the Central Government as three key municipal economic zones, functioning as an axis to promote development across the whole western area. The Ministry of Science and Technology approved a program for "Western China's Silicon Valley," a national-level new and high-tech industrial development belt in Shaanxi Province, with the Shaanxi section of the Longhai Railway (Lianyungang-Lanzhou) as the axis. This project integrates on Shaanxi's Guanzhong Plain four national-level and three provincial-level development zones, together with several dozen industrial and sci-tech parks. These sites will serve as bases for new and high-tech industries, such as electronic information, software, biomedicine, aeronautics, astronautics and new materials. They also will further promote the development of the relevant scientific research and industries and accelerate economic development in the surrounding areas.