Symposium on the Development of Western China, which opened in Chongqing on June 8, 2000. He expounded his view on the importance of system and the role of government in western development.

In combination with the actual conditions of Chongqing, he said, "In western development, what does Chongqing lack? First, capital, second, talented people. But these are not surface phenomena. In a more profound sense, Chongqing lacks a complete system which works efficiently and a fine environment."

According to Zhao, scientific and technological innovation ability is of vital importance to regional development. However, whether scientific and technological innovation can bring about efficiency or not depends more on the scientific and technological system rather than science and technology itself. The so-called system and environment are undoubtedly the system and environment favorable to bringing out the role of the market mechanism in allocating resources.

He gave an example to show that Chongqing lacks neither scientific and technological talents nor scientific and technological achievements. Two popular products were originally developed by Chongqing experts, but in the end the former was produced in Zhuhai and the latter in Chengdu. Why not in Chongqing? This is a question worth pondering deeply.

Here is another example. Last year, the Chongqing Municipal Government organized a group of experts to make a comparative study of the economic development situation between the eastern region and Chongqing. The results showed that the urbanization index in the coastal areas had reached 60-80, while that of Chongqing was only 30-40. Of the total retail volume of Chongqing in 1999, only 18 percent came from commodities produced in Chongqing itself. This demonstrated that local products do not well meet the demand of the market.

Zhao further pointed out that the most important role of the government in the urbanization process of the comparatively under-developed western region is to create conditions to make the market mechanism play an active role at all levels of society.

Zhao said that the first thing for certain is that the government will not be an "all-round government" as it was under the planned economy, so people can not expect the government to do everything for them in the course of development. In fact, the government can do only two things: one is to directly participate in infrastructure construction; the other is to perfect the system and create a favorable environment. The system here refers to a set of rules which can both invigorate individuals' working enthusiasm and creativity and effectively define behavioral boundaries between people. Certainly, these are only principles and objectives, and the detailed perfection of the system will greatly rely on all kinds of innovations made in the actual market.

Zhao said that Shenzhen, the development zone in Guangdong, was developed by setting up the processing trade. It has only one university, but it later developed into one of the high-tech industrial bases of China. One reason was that it drew up plans for a system, which can fully arouse people's creativity. Zhao said he admired Shenzhen's way very much.

Another important role of the government in the western development drive, Zhao said, is to lead the development pattern of the regional economy and the optimization of the economic structure. The formation of certain patterns or a certain structure basically depends on the market mechanism, so the government has made policies to lead various kinds of entities and coordinate the interests and relationships of all aspects. This requires the government to make unceasing innovations according to the local conditions.

To become a growth point for western development, he pointed out, Chongqing needs to promote its industrial level and requires a new economic growth point. Consequently, Chongqing needs to develop high-tech industries and expand the new technological contents in traditional industries. This does not mean that the government will take technological advance as the only index in industrial restructuring. As Chongqing abounds in labor, it is easier for it to develop labor-intensive industries.