China's West Development Requires Heavy Investment
BEIJING, Jan 17 Asia Pulse - China's west development drive is estimated to need a total of 20.9 trillion yuan (US$2.59 trillion) in the coming decade, according to a report, entitled Survey on Reform of Financial System in China's West Development.
The report was a result of 1.5-years joint research conducted by China's central bank and the Japan International Cooperation Association (JICA). The research covered various sectors of west China including finance, taxes, industries, legal system and policy, with focus on funds needed by various construction projects, and their forms and channels of financing.
The Chinese Government has kept on pouring money in the west development. In the 2001-2004 period, financial institutions issues Renminbi loans amounting to 3.14 trillion yuan in the 12 provinces, autonomous regions and municipality in west China, accounting for 16.4 per cent of the national total issued loans. Of the total, 1.66 trillion yuan were long and medium term loan, 19.69 per cent of the national total, and soaring 403 per cent over the end of 1998. The country injects 160 billion yuan in improvement of ecological environment in west China in 2001-2004. Under the credit support of banks, west part of China achieved 9.4 per cent, 10.3 per cent, 12.3 per cent and 12.45 per cent in GDP in recent years, respectively, higher than that of the national GDP.
But the biggest difficulty facing west China is still the shortage of funds. The research worked out with concrete figures. In the 2006-2015 period, the area will need a total of 20.9 trillion yuan, of which 10.02 trillion yuan will be for reproduction, 1.09 trillion yuan for development of agriculture; 0.17 trillion yuan for rural small loans, and 2.01 trillion yuan for construction of industrial infrastructure facilities.
By comparison, the report suggests founding of an
independent west development fund, which will be the best
solution, with the capital funds from allocation of the
Ministry of Finance, and most of the practical work shall be
done by the State Development Bank.