Central government policies designed to rein in overheated elements of China's economy are providing good opportunities to optimize local industry structures in the country's western region, said experts and officials at the ongoing 2004 Western Forum of China Friday.

"Macro-economic control has not slowed down the pace or the intensity of western development," said Li Zibin, deputy director general of the Office of the Leading Group for Western Region Development of the State Council.

In the first three quarters this year, the proportion of fixed assets investment in central and western China grew by 0.3 and 0.7percentage points respectively, soothing fears that tightened control of lending might hinder the growth of fledging western businesses in dire need of funds.

In the second half of 2003, China witnessed fast growth in investment. Repeated low-level construction of small electricity-generating plants, coke refineries and cement mills unreasonably consumed energy and brought heavy pollution.

The Chinese government took tough macro-control measures to prevent economic up and down. In the Ningxia Hui Autonomous Region,18 calcium carbide factories, 38 percent of the total factories inthe industry, were closed from April to August this year.

Li Xiaodong, director of the Shaanxi's reform and development commission, hailed the policy. "Low-level construction of small coke refineries and cement mills had begun to choke Shaanxi's economy," he acknowledged.

In Xinjiang Uygur Autonomous Region this year, just three percent of the total investment has gone to once over-heated industries such as cement, iron and steel, while seventy percent has gone to agriculture, energy, transportation, water conservation and infrastructure construction, which are weak and encouraged.

"The macro-control measures target structural changes, including unbalanced industry structure and unbalanced regional development," said Ma Xiaohe, director of the Institute of Industrial Development under the National Development and Reform Commission (NDRC). "Generally speaking, the western region will benefit from the initiative."

China's macro control measures have been under the world spotlight, igniting widespread discussions and doubts.

The central government has repeatedly sought to distinguish different industries, protecting those that need it while containing others. The government says that more substantial efforts will continue to go to agriculture, energy, transportation, and education, and that preferential polices will continue to be granted to central and western China.

"Western China is well placed to compete in labor, resources and special farm produce. It should take advantage of the opportunities brought by macro control to tap its advantages," Ma said.

The macro-control measures have paid off. Ningxia has closed more than 70 projects that consumed enormous amounts of energy this year. With more investment in agriculture, its grain production for this year is expected to hit three million tons, 300,000 tons more than last year.

"The macro economic control has cooled off some overheated industry while heating up the industries in short of supply, including coal, electric power, oil and transportation. It is a good opportunity to optimize the industry structure," said Ma.

Source: Xinhua