Fifty years ago, primitive means such as slash-and-burn cultivation prevailed in Tibet's agriculture and animal husbandry, industry was non-existent and transportation of goods depended solely on human and animal power. Today, however, Tibet's economy has evolved from the unitary primitive agriculture into a multiple structure with modern industry, agriculture and tertiary industry developing side by side.

Support From the Central Government

Since the early 1950s, the State has been giving special support to Tibet's economic development. It has allocated large amounts of financial subsidies, subsidized special projects and invested in key construction projects. It has also amassed and dispatched large amounts of materials to the Tibet Autonomous Region. Since the beginning of the 1980s, the State has arranged for government departments and other provinces, municipalities and autonomous regions to give Tibet manpower, material, financial and technological aid, with an aim of boosting the Tibetan economy and improving the people's livelihood. By 1997, the financial subsidies and investment in the key capital construction projects from the Central Government exceeded 40 billion Yuan.

Since 1980, the State has adopted a looser policy toward farmers and herdsmen in the Tibet Autonomous Region for them to build up their own economic strength. It stipulated that this is a long-term policy that "the farmland is distributed among farming households for individual management,"and "livestock are allocated to individual households, and independently owned, bred and managed by them."Farmers and herdsmen are exempt from agricultural and animal husbandry taxes. Collective enterprises and individual industrial and commercial businesses that produce and sell daily necessities are exempt from industrial and commercial consolidated taxes. Individual farmers and herdsmen and collective enterprises that sell or swap agricultural, animal husbandry and sideline products or handicrafts on market are also exempt from taxes.

Through construction over the past 50 years, especially the last 20-odd years of reform and opening up, the Tibetan economy has gradually evolved from a structure dependent on "blood transfusion"to one capable of "producing blood" In 1988, the "zero"record in local financial revenue was broken. Tibet's financial revenue exceeded 100 million Yuan in 1992 and reached 194 million Yuan in 1993, up 37 percent over the previous year. After 1994, the Tibetan economy had witnessed double-digit growth for five consecutive years, higher than the national average level. Tibet's GDP in 2001 reached 13.86 billion Yuan, an increase of 12.6 percent from the previous year, an increase which was 3.2 percentage points higher than the previous year. This put an end to the situation in which the growth decreased since 1996. Of this, the added value of the primary industry reached 3.747 billion Yuan, an increase of 3.1 percent; that of the secondary industry 3.218 billion Yuan, an increase of 17 percent; and the tertiary industry 6.895 billion Yuan, an increase of 17.3 percent. The region's GDP averaged 5,302 Yuan per capita in 2001.

Tibet has proceeded side by side with other parts of China in restructuring. It has conducted reform in the areas of planning, taxation, investment, foreign investment, finance, price and circulation. In particular, Tibet has made remarkable progress in enterprise reform. Some industries and State-owned enterprises in some areas have moved from deficits to profits in an all-round way. Stocks of six joint-stock companies have been listed on national stock exchanges. The private sector has developed rapidly.

Five Construction Upsurges

From the peaceful liberation in 1951 until now, Tibet has witnessed five unprecedented construction upsurges. With each bringing a leap in the Tibetan economy, these construction upsurges have laid a foundation for Tibet to enter into modern society.

•The 1950s witnessed the first construction upsurge, during which the east-west Sichuan-Tibet Highway, the north-south Qinghai-Tibet Highway, and the China-Nepal Highway from Lhasa to Kathmandu in Nepal were built. Also completed in the period was the Gonggar Airport in Lhasa. These facilities fundamentally ended Tibet's inaccessibility.

•In 1985, construction began on 43 projects, involving investment by the State and assistance by nine provinces and municipalities. This, symbolizing the second construction upsurge, ushered in Tibet's modernization drive.

• The third construction upsurge began at the turn of the 1990s. The State invested 3.2 billion Yuan in a number of large infrastructure facilities and the comprehensive development of the area around the middle reaches of the "three rivers" The construction, focusing on energy and transport projects, greatly improved the region's infrastructure.

The area around the middle reaches of the Yarlung Zangbo River and its two tributaries, the Lhasa and Nyangqu rivers (the "three rivers" is located in the south of the Qinghai-Tibet Plateau, adjoining Nyingchi in the east, Ngari in the west, national boundaries in the south and Nagqu in the north. Encompassing 1,890 villages and 231 townships (towns and urban neighborhoods) in 18 counties (county-level cities and urban districts) under the jurisdiction of Lhasa City and Xigaze Prefecture, the area is home to 798,600 people, or 36.37 percent of Tibet's population. The development area is the political, economic, cultural and transportation center of Tibet, as well as a major granary. It has thus been famed as a "golden triangle"of Tibet.

The "three-river"comprehensive development project began in May 1991. Up to 2000, some 220 projects had been constructed.

Through 10 years of development, the area's total industrial and agricultural output value increased from 840 million Yuan in 1990 to 2.473 billion Yuan, with an annual growth of 11.4 percent. Of this, agricultural output value rose from 653 million Yuan in 1990 to 1.661 billion Yuan in 2000, up 9.79 percent annually; industrial output value rose from 187 million Yuan to 812 million Yuan, an average annual rise of 15.82 percent. The per-capita income of farmers and herdsmen increased from 602.24 Yuan in 1991 to 1,450 Yuan in 2000.

• The fourth construction upsurge was motivated by the Third National Conference on Work in Tibet held by the Party Central Committee and the State Council during July 20-23, 1994. The conference decided that the Tibetan economy would maintain an annual growth of about 10 percent in the coming years; efforts would be made to improve the living standard of farmers and herdsmen, who account for 80 percent of the region's population; and by 2000 Tibet would be self-sufficient in grain, edible oil and tea. To achieve these goals, the Central Government decided in 1994 to invest an additional 2.38 billion Yuan in 62 more engineering projects. To date, these projects have all been completed, with actual investment hitting 4.16 billion Yuan.

The 62 projects involve nine agricultural and water conservancy projects, 17 energy projects (including four correlated ones), seven transportation and telecommunications projects, 11 industrial projects, and 22 social service and municipal construction projects. Half received Central Government investment.

The completion of these projects has increased the region's hydropower generating capacity by 37,000 kw and electric energy production by 289 million kwh annually. With the addition of another 30,000 lines in switching capacity, the long-distance telephone communication service capacity has doubled. Newly added capacities also include 35 million kg of flour, 3 million kg of vegetable oil and 16,000 tons of urban water. The number of hospital beds has increased by 400 and annual enrolment of middle schools by 4,900. Broadcast and TV coverage has increased by a certain margin and almost every administrative township has had a broadcast/TV receiving station.

• The Fifth Upsurge of Construction began with the convocation of the 4th National Conference on Work in Tibet, held by the CPC Central Committee and the State Council from June 25-27, 2001. The Conference helped Tibet formulate the plan for development during the 10th Five-Year Plan, and determined 117 projects involving direct State investment to the tune of 31.2 billion Yuan, including 12 billion Yuan slated for construction of the Tibetan section of the Qinghai-Tibet Railway. These include 42 projects involving a total investment of 25.6 billion Yuan in such fields of farming, forestry, animal husbandry, water conservancy, energy, transport and other economic fields; and 75 projects involving a total investment of 5.6 billion Yuan in fields related to social development such as posts and telecommunications, education, health, radio broadcast, TV, tourism, urban infrastructure and construction of political power at the grassroots level. Compared with projects determined at the previous Conference, the number of projects to be undertaken increased by 87 and the amount of investment to be made increased by 27.4 billion Yuan.

In the meantime, the Conference determined 70 projects to be undertaken with 1.062 billion Yuan investment from various provinces, autonomous regions and municipalities directly under the Central Government.

The Conference set forth 50 pieces of preferential regulations, including 18 pieces formulated previously and decided to be implemented continuously, 20 pieces formulated previously but improved during the Conference, and 12 pieces formulated during the Conference. Central Government subsidies for Tibet reached 37.9 billion Yuan, 100 percent more than the 9th Five-Year Plan Period. State investment in projects and aid work totaled 32.2 billion Yuan. The 70-odd billion Yuan investment from the Central Government makes it possible for Tibet to achieve fast socio-economic development during the 10th Five-Year Plan.

Construction of the projects determined during the Fourth Work Conference is in full swing.

During the 10th Five-Year Plan, Tibet will strive to see an annual average increase in GDP of 12 percent. By 2005, Tibet's per-capita share of GDP will be in the forefront of west China, and achieve the medium-level in China as a whole. The per-capita net income of farmers and herders will surpass 2,000 Yuan, achieving an annual average increase of 8.5 percent. More than 95 percent of the towns and 70 percent of administrative villages will have access to highways, representing 7-10 percentage points from the current level. Installed generators will reach 500,000 KW in capacity. The purpose is to make 80 percent of farmers and herders to have access electric power. Also by 2005, more than 95 percent of the the school-age children will study in schools, a figure which is close to 10 percentage points higher than the current level.