China's Western Development And Taxation Policy Research

In 1986, according to both the level of economic technology and geographical location, "seven five"plan divided Chinese economic area into east-region,middle-region and west-region. West-region includes nine provinces, such as Shanxin,Qinghai,Ningxia,Xinjiang,Gansu,Sichuan,Guizhou,Yunnan,Xizang. In 1997, after Sichuan province was divided into Chongqing and new Sichuan province, west-region become ten provinces. There are obvious differences of economic development between three economic regions. Many provinces, such as all or partial Inner mongolia,Guangxi,Hunan and Hubei region , are adjacent to ten west-regions,and the indices of per gross domestic product are located almost same level. hence, Chinese west-region include twelve provinces, that is ,five west-south provinces(Sichuan,Guizhou,Yunnan,Xizang and Chongqing),five west-north provinces(Shanxin,Qinghai,Ningxia,Xinjiang,Gansu) and Inner mongolia,Guangxi, which often are referred to as "10+2". And as to some regions, which is low economic level and with great difficulties in sofar development, such as west-Hunan and west-Hubei, government take particult approchs, and related policies which are similar to west-region are applied to west-Hunan,Enshi in Hubei,Yanbian in Jilin province.In this paper, our research focus on these twelve provinces. These twelve provinces administed 103 regions,913 counties, 685 square kilometers land acreage, and up to 71.4% of all Chinese land acreage. By the end of 2002, total population of west-region are 3.67 hundred millions,up to 28.56% of Chinese population. West-region located most of Chinese minority, and up to 70% of total Chineseminority.West-region are abundant in land,water energy,mines and tour resources, but in west-region, the levels of industrial structure are low, comparative benefit is poor, their total levels are just the same as Chinese early 1990's level; agriculture structure mainly are planting, labor productivity is low, product's added-value and commodity ratio are low ,and zoology costs are large; total industrial products are small, industrial growth is sluggish; heavy industrial proportions are so high and light industries' proportion are so small, the development of heavy industries and light industries are out of joint; total service products are insufficient, service structure is irrational, and development levels are low. Tour resources are run with inefficient, tour industry is sluggish.Fasting economic globalization will promote persistent and stable world economy and trade development, and underdeveloping regions will find new develop opportunities. At the same time, the uncertainty about international economic circumstances are dramatically growing, such thing also take underdeveloping regions into disadvantageous conditions. Rapid development and wide diffusion of science and technology provide theoretic basis and technological precondition for developing country employing "after-ward advantage" and obtaining radip development. In addition, developing west-region possess good macroeconomic circumstances: Chinese total power are growing, this offers large initial funds and technical base for developing west-region. Noted that in the very long run there are complex contradictions and difficulties during the course of developing west-region. First, primary formation of domestic buyer market and growing market degree make developing west-region change developing thought line and administration mode. Second, key breakthrough in reform of invest and finance system will add difficulty in raising large-scale funds and using all kinds of developing and building fund. Third, right and obligation accompanied with entering into World Trade Organization take forth requirement of acquainting and adapting international general rule as fast as possible for developing west-region.Implementing the strategy of developing west-region and fasting the development of west-region are Chinese Communist Party's important decision at the end of millenary, based on all Chinese conditions. Implementing the strategy of developing west-region is specific representation of holding Deng Xiaoping banner hig,carrying out socialistic modernization "three-step" strategy and "two overall-situation" idea. For enlarging domestic demand, advancing persistent,quick and healthy economic development, boosting each region's development with harmony, obtaining final richness together, enhancing ethical solidification, maintaining national unification, holding social stabilization, developing west-region has very important significance. Based on summarizing theory of underdeveloping nation and region development and referred foreign experiences and lessons, this paper discussed related finance and tax policies for advancing west-region development. That is, this paper includes five chapters:Chapter 1: theoretical discussion of Chinese developing west-region. From the aspects of natural and social restricted elements and initiated elements, such as management innovation of entrepreneur,technical innovation,institutional innovation, as well as general elements, such as capital and structural change, first section summarizes economic division and economic development theory about underdeveloped regions; Based on these, this section further discuss regional economic growth phase theory, which includes general region growth phase and economic growth phase, as well as regional economic growth mode, such as prior development of heavy industry,development of import substitute, development of export direction and agricultural development. Second section is change in regional economic structure of underdeveloped region. Which summarizes "dual-structure" theory, such as Lewis' model, Rain-fei's model and Jorgenson model, as well as divisional and transitional rule of industrial structure, cause, shape and mechanism of transition in industrial structure, change in industrial structure and economic growth annalysis,location of regional industry structure. Third section discuss theoretical significance and strategy of Chinese developing west-region.Chapter two: apocalypses offered by foreign underdeveloped region's finance and taxation policies. First section is finance and taxation policies of developing underdeveloped region, we discuss Israel and Egypt's finance and tax policy about developing desert region as well as finance and tax policies about England, France, German, Italy, Russia and America; Second section is experiences and lessons offered by foreign government in developing underdeveloped regions; Third section is apocalypses given by foreign experiences and lessons. Chapter three: developing Chinese west-region vs. finance and tax policies. First section consider government's effect during the course of economic development; Second section, from the perspective of economic policies' goal and elementary contents, further discuss government's finance and tax policies in developing west-region. Third section consider finance and tax policies' important significance in developing west-region.Chapter four: finance policies in developing west-region. First section consider developing west-region and finance policies, from the perspective of finance pilicies' function,effect,goal and means,historical evolution of Chinese west-region's finance policies, as well as the type of Chinese finance policies in developing west-region; Second section consider finance policies innovation in developing west-region, from the perspective of building up formative central government finance transfer institution,adjust tax rebound index,properly adjust shared tax division proportion ration between central government and west-region provinces,carrying out differential tax ratio,building up developing west-region fund,issuing specific treasure bill applied to developing; west-region.Chapter five: tax policies in developing west-region. First section is function and goal of tax policies in developing west-region; Second section considers tax policies which supports developing west-region, particularly we discuss related tax policies, which advances environment-protection industry,attracts foreign funds,develops west-region's key areas as well as adjusts economic differences between east and west region.