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a win-win game between China's east and west. He said that the time is ripe for the western
development drive. First of all, the 20 years of reform and opening have
widened the gap between the eastern and western areas. To narrow the gap,
it is not advisable to passively slow down the development of the east.
The only way is to take active measures to accelerate construction in
the west. The state has thus far put forth many preferential policies,
such as those in relation to credit loans and taxes to encourage foreign
investors to "advance towards the west." The western development
is actually a mammoth project. Secondly, with over one trillion yuan of
revenue last year, the state has accumulated sufficient financial strength.
Without sufficient financial support, the western development drive would
be impossible. The eastern areas have relatively surplus production capacity
and materials and need to seek further development, and the western development
can promote the eastern production and consumption. In the past, in order
to accelerate the development of the central and western areas, the state
encouraged eastern enterprises to go west with a certain degree of poverty
aid. Such enterprises are rare now and some have been bogged down in the
west. But in comparison, the current western development is different
in terms of practices, conditions, concepts, backgrounds and state policies. He said that the strategy of western development
would certainly attract a considerable number of eastern enterprises.
With the inducement of the government and policy support, soft and hard
environment for investments in the west will improve. Eastern enterprises
will enter the western areas according to their own characteristics, both
in terms of the industry and the enterprise itself. Though deficient in
funds and projects, the west will act and apply for state projects spurred
by the national strategy of western development. Lu believes that the western development
will not produce adverse effects on the eastern economy. The east and
west will have a win-win game. He said that the western development is
based on the sufficient financial strength of the state and will add no
tax burden on the east. In view of the market relationships, the strategy
will better promote the development of eastern enterprises. The input
in the west can launch the western market and promote consumption, inducing
eastern advantages to flow into the west. Eastern enterprises should make
full use of this opportunity. Once the west has a fine investment environment,
eastern enterprises can get good returns there. However, the eastern areas
should not dump backward things into the west. Lu
hopes that Wanxiang can make its due contribution to the cause of western
development. He said that Wanxiang had formed the thinking of "western
advance" five years ago, but achieved little substantive progress.
Wanxiang has established some industrial enterprises in Henan and Hubei
provinces. This year it plans to cooperate with local main-engine plants
in Jiangxi, Guangxi, Jilin and Hubei. Where there is a market, there Wanxiang
will go. Although it has no investment in the west for the time being,
it will definitely go west once there are good prospects. The key point
is to find realistic access. The input of Wanxiang will be 1.64 billion
yuan this year. Wanxiang's investment is based on three criteria: (1)
whether the project conforms to the state's industrial policy; (2) whether
the project has the potential for development; and (3) whether the project
is profitable. Under these three prerequisites, further consideration
will be given to its own ability and strength as well as the possible
risk. An enterprise can only grow through input. |
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