The Industrial Development of Western China in the First 5 years of Western Development Program

Abstract

Since 1999, China launched the program of western development and began to implement a series of development plans in 2000.  As the economic base, industrial sectors are one of the development focuses of the program. An important policy measure in the program is to increase investment.  As we know, investment, especially government investment, has been  the main source maintaining China’s high speed growth for a long time. Investment growth causes fast capital accumulation and then scale expansion of industries. However, capital productivity decides the impact of investment on promoting economic growth. Investing in low productivity sectors will not only waste capital, but also accumulate economic risk. Recently, China has realized that high inputs and relative low income are not a recipe for a sustainable growth mode. It’s important to improve industries’ productivity to grow more efficiently.