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Beijing Invests US$100 Billion in Western China

Jul. 7 – China will invest US$100 billion in 23 new infrastructure projects across the country’s remote western expanses in an attempt to develop the region’s lackluster economy, according to state sources.

The government’s decision comes as a welcome attempt to address the longstanding and serious issue of expanding inequality between China’s coastal provinces and the nation’s hinterland.

China’s National Development and Reform Commission announced the US$100 billion infrastructure investment on its web site on Tuesday, the day after Premier Wen Jiabao stated that the Chinese economy was in the midst of an “extremely complicated” situation.

The NDRC confirmed that the large-scale investment will go towards airports, roads and railways, coal mines, and nuclear power station projects which it believes will “actively expand domestic demand and promote the fast and health development of the western areas.”

The proposed infrastructure fund will cover projects in the Chinese autonomous regions of Inner Mongolia, Tiber, and Xinjiang as well as the provinces of Sichuan and Yunnan. This new plan is in addition to the pledge of US$1.5 billion already made by the Chinese government last month aimed at raising the living standards of the Uighur minority in Xinjiang. China has already spent US$322 billion on major projects throughout the region over the last 10 years.

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One Response to Beijing Invests US$100 Billion in Western China

  1. Chris Devonshire-Ellis says:

    Xinjiang was badly hit economically by the riots there last year, we know directly that a lot of foreign investors lost everything and left. The restrictions at the time on access, communications and so on left businesses simply unable to function. So much for the effect of occasional Chinese crackdowns on the investors they need in the region. Xinjiang requires an extra risk factor built into it when deciding to go, let alone the Islamic sensibilities required to operate there. I’ll be making an extensive tour of the region for most of next month to evaluate business opportunities, including trips to Kazakhstan, Pakistan & Kyrgsztan to assess the potential for cross border trade and Central Asia development with Xinjiang. Our partner firm in Russia maintains an office in Almaty, trade with Kazhakstan will be an important area of focus of my trip and of where Xinjiang is heading. Those results we will publish in a special Xinjiang & Central Asian investment climate report available here. – Chris

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