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3
Key Focus Areas of the Go West Policy
1. Infrastructure and Logistics2. Economic Growth3. Education and Social
4
Go West Policy Making larger and faster developments. Creating
more ideas, enlarging reforms and unifying the west. Science and education is a strategy to accomplish these goals.
Vastly improving infrastructure as well as environmental protection.
Develop science, education and health care. Enhance construction funds to the western regions. Infrastructural improvements will focus on water
conservation, transportation, energy and resource development.
Taking emphasis on supporting the poor. More natural forest protection will be implemented. Speed up the process of implementing modern
enterprises.
5
Go West Policy Continued
Establish tax incentives to attract businesses to the west.
Expand foreign investment in agriculture, water conservation, ecology, transportation, energy, municipal administration, environmental protection, minerals, traveling as well as engineering research.
Expand foreign economic trade. Improving lifestyles to attract foreign and east coast
workers. Continue compulsory education for the poor. Investing in college constructions in the west. Improve cultural and ethical statuses. Promoting minority regions for development.
6
Who is affected?
Chongqing Municipality ( 重庆 ) Inner Mongolia Ningxia Hui Auto. Regions ( 宁夏回族自治区 ) Gansu ( 甘肃 ) Guizhou ( 贵州 ) Sichuan ( 四川 ) Yunnan ( 云南 ) Tibet ( 西藏 ) Xinjiang Uygur Auto. Regions ( 新疆维吾尔自治
区 )
8
Benefits of the West
There are abundant natural resources, cheap labor, cheap land and large economic potential.
The western region borders 10 countries, allowing for economic opportunities.
Western China accounts for 77% of available water in the country. However, only 1% of that is utilized by the west.
9
Chongqing ( 重庆 )Age Demographics
2005 2015 20250%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
60+40 to 5925 to 3915 to 240 to 14
Source: Asian Demographics, 2006
10
Sichuan ( 四川 )Age Demographics
2005 2015 20250%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
60+40 to 5925 to 3915 to 240 to 14
Source: Asian Demographics, 2006
11
Yunnan ( 云南 )Age Demographics
2005 2015 20250%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
60+40 to 5925 to 3915 to 240 to 14
Source: Asian Demographics, 2006
12
Guizhou ( 贵州 )Age Demographics
2005 2015 20250%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
60+40 to 5925 to 3915 to 240 to 14
Source: Asian Demographics, 2006
13
Key Focus Areas of the Go West Policy
1. Infrastructure and Logistics2. Economic Growth3. Education and Social
18
Infrastructure Development in West China
Expanding the transportation network such as railways, airports, electricity grids, etc… Improvements in Infrastructure will make transferring products and raw materials from the east to the west more convenient, and vise versa.
19
Infrastructure Development in West China
The Chinese government has spent about 1 trillion RMB for improvements in transportation, water conservancy facilities, energy resources and telecommunications services for western China.
20
Infrastructure Development in West China
From 2000 to 2005 the Chinese central government has contributed 460 billion Yuan (55.4 billion USD)in infrastructure for the western regions. Plus over 500 billion Yuan (60.2 billion USD) more for additional subsidies.
21
Infrastructure Development in West China
70 new infrastructural projects have been commenced such as hydropower plants and telecommunications networks.
226,000 Kilometers of highways and more than 4,000 kilometers of railways have been built in western China since 2000.
22
Infrastructure Development in West China
89.5 % of villages are now connected to highways.
99% of townships in western China have power supplies.
Clean water is accessible to 36 million rural people.
23
Infrastructure Development in West China
By 2011, 6.67 billion USD will be spent on West China’s air infrastructure. (airports, etc.)
China’s economic stimulus package will spend 4 trillion RMB in 2008-2010 on infrastructure, economy, education, env-ironment, etc.
25
Chongqing and Energy
Chongqing has ½ of the country’s total natural gas reserves.
70% of Chongqing’s energy production is coal, but coal reserves are very limited.
Hydropower only accounted for 15% of the total electricity demand in 2005.
Chongqing is planning to construct nuclear, wind and solar power stations.
26
Guizhou and Energy
Part of the“west-to-east” electricity transmission project.
Their largest market is energy, which accounts for one-third of the economic output.
95% of all power plants are coal powered.
Guizhou has the sixth largest water resource in the country, which could be used in hydro power plants.
27
Yunnan and Energy Yunnan is the eighth most abundant in
coal in the country. For the past decade hydro-electricity
has consisted for 53-60 percent of all produced energy.
Kunming is known as the “solar capital”, because 30% of the city runs on solar power.
Yunnan is currently working on developing solar, wind, geothermal and biomass resources.
28
Sichuan and Energy
Sichuan is the country leader in hydropower.
There is an abundant supply of natural gas, but the region is low in oil.
Sichuan’s coal reserves only make up for 3% of the country’s total coal reserves.
Companies from Spain and the UK have invested 20 billion RMB into developing biodiesel.
29
Infrastructure Statistics 2007
Gansu
(甘肃
)
Tibe
t (西藏
)
Yunn
an (
云南)
Guizh
ou (
贵州)
Chong
qing
(重庆
)
Sich
uan
( 四川)
-
2,000
4,000
6,000
8,000
10,000
12,000
Length of Paved Roads (km)Number of City BridgesLength of City Sewage Pipes (km)
*From China Statistical Yearbook 2008
Source: China Statistical Yearbook 2008
30
Number of Private-owned Vehicles
Gansu
(甘肃
)
Sich
uan
( 四川)
Tibe
t (西藏
)
Yunn
an (
云南)
Guizh
ou (
贵州)
Chong
qing
(重庆
)0
200000
400000
600000
800000
1000000
1200000
1400000
20002007
Source: China Statistical Yearbook 2001 and 2008
31
Infrastructure in Chongqing
As of now, there are three major railroad lines that run through Chongqing.
By 2017, there should be a Chongqing-Shanghai high-speed railway
Chongqing Mayor, Huang Qifan, has said that in the next four years, Chongqing will build the same length of railway lines as Chongqing has in the last fifty years.
32
Infrastructure in Chongqing
Chongqing’s Jiangbei International Airport continues to increase its variety of available transports to countries.
33
Infrastructure in Chongqing
The Yangtze river provides Chongqing with another way of transportation to other cities in China.
34
TEU Transportation
TEU stands for “Twenty-Foot Equivalent Unit.”
Chengdu opened a new air cargo facility in 2006 that is five times the size as the previous cargo facility. It is the largest in the South-western region.
The newly constructed Shanghai-Chongqing expressway has cut traveling from weeks to almost three days.
35
Barge capacities have risen from 3,000 dwt (deadweight tonnage) to 10,000 dwt in Chongqing.
The annual river traffic volume in Chongqing will rise from 10 million to 60 million tons due to larger capacity barges.
Costs in transporting goods by barge will decrease to 1/3 of the current cost.
TEU Transportation
36
The Cost of Going West
Chongqing-Shanghai
Distance (km)
Transit Time
(Days)
Cost (US$, TEU)
Road 2,150 3-4 1,540
Rail 2,250 7-10 550
Barge 2,400 8-10 (12-13
upriver)
320
Source: Deloitte & Touche “The Yangtze River transport corridor”
37
Infrastructure in Chongqing
By the end of 2010, 1,600 km of highway will have been built in Chongqing. Eight new bridges will have also been constructed by then.
Chongqing-Zhangjiang
Chongqing-Shanghai
Chongqing-Chengdu
0 10 20 30 40
Time to Travel on Highways
Current Previous
Hours
The construction of a 350 km/h high-speed railway linking Chongqing to Chengdu is projected to open in 2012
38
Total Length of Highways (Km)
-
50,000
100,000
150,000
200,000
250,000
20002007
Source: China Statistical Yearbook 2001 and 2008
39
Number of Hospitals by Region
Gansu
(甘肃
)
Sich
uan
( 四川)
Tibe
t (西藏
)
Yunn
an (
云南)
Guizh
ou (
贵州)
Chong
qing
(重庆
)0
200
400
600
800
1000
1200
20002007
Source: China Statistical Yearbook 2001 and 2008
40
Highway Accident Mortality Rates
Year Deaths per 10,000 Vehicles
2002 37.50
2003 30.70
2004 18.30
2005 14.51
2006 10.83
2007 9.26
Source: China Statistical Yearbook 2008
41
Side Effects to Improved Infrastructure
China is switching to Natural Gas as the main energy source.
China is the leader in CO2 emissions. Many power outages have occurred due
to growing power demands. Even though there are efforts to decrease
pollution, a growing urban population will pose as a threat to the environment.
China’s Renewable Energy Law looks to help the environment
42
Environment in West China Part of the plan is cultivating land into
forests, and forest protection. By the end of 2004, local people had
planted 11.3 million hectares of trees on barren land.
One of the projects in the Go West policy was to plant trees on 7.71 million hectares of barren hills and wasteland.
5.65 million hectares of farmland are planned to be converted into forests.
43
Environment in West China
Currently, China contains 16 of the world’s 20 most polluted cities.
2 of the 16 cities in China are located in the Western regions(Shizuishan 石嘴山 and Jincheng 晋城 ).
44
Chongqing Environmental Aspect
The Chemical oxygen demand was reduced by 10% from 2003 to 2008.
SO2 emissions were reduced by 15% from 2003 to 2008.
A three-year plan to remove and rebuild old, and decaying buildings has been put into affect.
Living conditions for 90,000 residents in Chongqing were improved.
The Chongqing government invested 2.06 billion RMB in planting trees on 2 million mu of barren land.
45
Chongqing Environmental goals in 2009
A second set of industrial waste water treatment will be promoted in the Three Gorges reservoir.
The Chongqing government will initiate a campaign in making Chongqing the national forested city.
Encouraging 100 upgrading projects in energy-saving and pollution-reducing technology.
47
Key Focus Areas of the Go West Policy
1. Infrastructure and Logistics2. Economic Growth3. Education and Social
48
Economic Growth Encouraging the western region to
magnetize foreign investment, technology and expertise.
The government is also encouraging businesses on the east to invest in western regions.
Bringing in management and techniques from the east and internationally to Western China.
Chongqing currently has trade connections with more than 140 companies and 3,700 joint ventures.
49
30,000 local companies from the east have moved to the western regions.
The government has encouraged foreign investors to invest in industries of energy and chemicals, finance, mining, production of agricultural by-products, manufacturing, hi-tech, and tourism in 2007.
Since 2000 western China has had an average economic growth rate of 10.7% annually.
Economic Growth
50
Economic Growth
Nokia, Motorola, Ericsson, Suzuki, Ford, Honda, Intel.
Intel Corp. invested around 450 million USD in Chengdu, as a result computer sales have reached as high as a 45% growth each year.
Chongqing ranks as the 2nd highest in economic growth(2006-08). 1st in (2009-10).
51
Chongqing 2005 Top Export Destinations
USA39%
Japan22%
Vietnam15%
Hong Kong12%
Germany12%
Source: China Customs Info, 2006
52
Sichuan 2005 Top Export Destinations
USA28%
Hong Kong23%Japan
20%
South Korea14%
In-donesia
14%
Source: China Customs Info, 2006
53
Yunnan 2005 Top Export Destinations
Hong Kong28%
Japan25%
Vietnam19%
Myanmar16%
USA12%
Source: China Customs Info, 2006
54
Guizhou 2005 Top Export Destinations
Japan36%
Hong Kong18%
USA17%
Vietnam15%
South Korea14%
Source: China Customs Info, 2006
55
Gross Domestic Product
Definition: The country’s overall economic performance
GDP can be calculated in three ways:
1. Product – The output sum of all classes of enterprises
2. Income- The profit sum of all classes of enterprises
3. Expenditure: GDP = Private Consumption +Gross Investment + Government Spending +(Exports – Imports)
56
China GDPGDP At Current Market
Prices (USD 100 million)
GDP Real Growth Rate over the Preceding
Year (%)
2000 1691 8
2001 1666 0.5
2002 1638 1.8
2003 1586 3.0
2004 1659 8.5
2005 1778 7.1
2006 1900 7.0
2007 2072 6.4
Source: China Statistical Yearbook 2008
58
GDP Per Capita
2001200220032004200520062007 -
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Guizhou ( 贵州 )
Yunnan ( 云南 )
Chongqing ( 重庆 )
Sichuan ( 四川 )
Source: Asian Demographics, 2006
60
Tax Incentives in Western China
Currently the majority of China’s businesses are on the east coast. In order for China to gain domestic and foreign investments in western China, their must be incentives for enterprises to invest in the west. The Chinese government has set special tax incentives in western China to lure enterprises into the region.
Corporate taxes of enterprises in the government-encouraged areas, are reduced to 15% in the 2001-2010 period.
61
New enterprises may be allowed income tax reduction or exemption if that enterprise takes on services transport, power, water conservancy, postal service, broadcasting and television and etc.
Special agricultural taxes will not be placed for ten years on projects that involve cultivating land into forestry.
Tax Incentives in Western China
62
The ASEAN-China free trade agreement, which was signed in 2001, will remove tariffs on 7000 products by the year 2015. The ASEAN countries consists of Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.
Tax Incentives in Western China
63
Exports
Source: China Statistical Yearbook 2004, 2005, 2006, 2007, 2008
2003 2004 2005 2006 20070
10
20
30
40
50
60
70
80
Anhui ( 安徽 )
Fujian ( 福建)Shandong ( 山东 )
Hubei ( 湖北 )
Chongqing ( 重庆 )
Sichuan ( 四川 )
Year
$U
S B
illion
64
Key Focus Areas of the Go West Policy
1. Infrastructure and Logistics2. Economic Growth3. Education and Social
65
Education
Education is one of the major goals in Western China.
One advantage is that labor is cheaper. However, quality of workers need to be taken into consideration.
If the educational level in the west meets the east, more enterprises would move toward the west.
Improving education in the fields of science and technology for better product development.
66
Education
More than 7,000 primary and middle school buildings have been reconstructed.
The policy will raise the average years of education.
The central government will spend 6 billion RMB on civil works, teacher training and minority education.
In 2006, rural students in some regions of Western China received free education, along with free textbooks.
67
Education in Chongqing
As a result from a social program, 3.7 million students were a part of free compulsory education, up to age 13, in urban and rural areas.
The proportion of students making the transition from Junior middle schools to Senior high schools rose each year.
The net enrollment rate of higher education rose to 24.5%.
Primary and middle school teachers in rural schools were given 200 Yuan a month in subsidies beginning in October, 2008.
68
Chongqing Educational Goals for 2009
Make school condition improvements for underdeveloped schools.
Increase support for poor students in both rural and urban regions.
High school enrolment will increase by speeding up the high school enrollment rate to 88%
Have 700,000 college students and 13 colleges located in the University Town.
Encourage reforms to reduce the heavy work load that students currently have.
69
Number of Primary Schools by Region (2002 and 2007)
Source: China Statistical Yearbook 2003, 2008
Gansu
(甘肃
)
Sich
uan
( 四川)
Tibe
t (西藏
)
Yuna
n ( 云南
)
Guizh
ou (
贵州)
Chong
qing
(重庆
)0
5000
10000
15000
20000
25000
30000
20022007
70
Junior Middle School Educational Attainment
Gansu
(甘肃
)
Guizh
ou (
贵州)
Yunn
an (
云南)
Tibe
t (西藏
)
Chong
qing
(重庆
)
Sich
uan
( 四川)
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
20022007
Source: China Statistical Yearbook 2003, 2008
71
Senior Secondary School Educational Attainment
Gansu
(甘肃
)
Guizh
ou (
贵州)
Yunn
an (
云南)
Tibe
t (西藏
)
Chong
qing
(重庆
)
Sich
uan
( 四川)
- 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000
20022007
Source: China Statistical Yearbook 2003, 2008
72
College and Higher Level Education Attainment
Gansu
(甘肃
)
Guizh
ou (
贵州)
Yunn
an (
云南)
Tibe
t (西藏
)
Chong
qing
(重庆
)
Sich
uan
( 四川)
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
20022007
Source: China Statistical Yearbook 2003, 2008
73
2000 2001 2002 2003 2004 2005 2006 2007 -
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
Number of Students Enrolled in Regular In-stitutions of Higher Education in Chongqing
Year
Stu
den
ts
74
Illiterate Population for Ages 15 and Older
Gansu
(甘肃
)
Guizh
ou (
贵州)
Tibe
t (西藏
)
Yunn
an (
云南)
Sich
uan
( 四川)
Chong
qing
(重庆
)05
1015202530354045
TotalMaleFemale
Perc
en
tag
e o
f p
op
ula
tion
Source: China Statistical Yearbook 2008
75
Educational Overview of the Go West Policy
The government is providing education to both rural and urban communities
Billions of RMB have been spent on school buildings
The quality of education must improve in order for Western Chinese workers to compete for jobs.
China’s growing economy may be hurt by the quality of Chinese workers.
While College and higher level educational attainment is growing, all other levels of educational attainment are stagnant. This may also hurt China in the long run.
77
Challenges to the Go West Plan
Between 2000 and 2005, the West has only drawn in 2 billion USD a year, while Shanghai alone was able to attract more than twice that amount.
The infrastructure has not developed to the level of luring many foreign enterprises.
Importing and exporting to the east coast causes problems because of proximity issues.
Natural surroundings, such as mountains, also make connections to the east coast difficult.
78
Challenges to the Go West Plan
Labor is cheaper in the west, but less qualified as well.
Lack of foreign lifestyles. Areas such as Xinjiang and Tibet,
that have a large minority population, will be difficult to utilize if ethnic conflicts do not lessen.
79
Progress In the West The overall economy of the west is growing. There is more government spending on education than
before. Enterprises are starting to become more
environmentally friendly in the western regions. The government is appropriating large sums of money
into improving infrastructure. Transportation is improving rapidly, allowing imports
and exports to be shipped easily to and from the western regions.“If Chongqing can keep its momentum up, in 10 years
it will be like Shanghai today.”-Huang Qifan,
Mayor of Chongqing
80
Is It Working?
Infrastructure is improving rapidly.
Barge shipping creates larger business. opportunities.
Development of reusable energy sources.
GDP and FDI are raising. Large foreign industries
are investing in Western regions of China.
Higher education is improving, while secondary schools are lagging behind.
Work quality is an issue.
Limited resources will become a factor as the country is modernizing.
Pros
Cons
81
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