Noteworthy is the fact that township enterprises in the eastern coastal areas are continuing to expand with an annual rate of 30 percent. This has resulted in a widening gap between their yields and those of their counterparts in central and west China. The chasm is due to the latter's poor foundations and low initial quantities although it has attained remarkable growth in recent years.

Wang Shuangxi, deputy governor of Shaanxi Province who was also a deputy to the Eighth NPC, noted that the differences had both objective and subjective reasons. Underdeveloped communications, and remoteness from the world market constitute the objective reasons for the dearth of foreign investment. The lack of market conciousness, the deep-rooted idea of stressing farming to the neglect of commerce, and conservatism of farmers and many local cadres resulting from the long-term isolation of hinterland rural areas have formed the subjective face of the problem. The province has more than 300 state-owned large and medium-sized enterprises. The provincial government used to focus on them, ignoring the development of township enterprises. During the economic readjustment from late 1988 to late 1991, while the investment in coastal township enterprises by the eastern coastal areas saw no reduction, that for Shaanxi Province stood at zero.

Feng Qifu, a deputy from Shanxi Province who is the director of the Administrative Office of Luliang Prefecture, noted that deficient capital, capable staff and information were the most important restraints acting against the development of local township enterprises.

Potential

During discussion, deputies from China's central and western provinces listed the advantages of these localities, the principal being resources. Feng Qifu said 50 percent of Luliang Prefecture has coal deposit with initially verified reserves hitting 31.3 billion tons, and most being low-sulphur and low-dust quality coal. Luliang also boasts abundant bauxite and iron ore, with verified reserves being 1 billion tons and 1.097 billion tons respectively. In addition, it abounds in farm and sideline product resources. Annual date output comes to 15-20 million kg, while that of walnuts tops 10 million kg, with both in national top rank.

The coal in Shanxi Province, oil in the Xinjiang Uygur Autonomous Region and nonferrous metals in Gansu, Yunnan, Jiangxi and Hunan provinces, occupy a decisive position in China's national economy, making the central and western regions chief energy and raw material suppliers for areas in east China.

Over the 40-plus years since the founding of New China, the country has plowed several hundred billion yuan into the central and western regions for the establishment of large-scale energy, raw materials, heavy industry, astronautics and aeronautics, and textile industrial bases. Shaanxi, Sichuan, Hubei and Gansu provinces have more scientific and technical personnel than the coastal provinces.

For central and west China itself, imbalance also exists. In some areas, progress of township enterprises has reached coastal levels. Last year, the total output value of the township enterprises in Sichuan Province, which possesses a population of 110 million, exceeded 100 billion yuan.

Jiaozuo is a small city located in northwestern Henan Province and adjourns Shanxi Province. By the end of 1992, some 81,900 township enterprises had been set up in its seven counties, employing 496,000 workers or 40 percent of the local agrarian labor force. These enterprises created a total of 13.58 billion yuan in output value last year, representing an increase of 56 percent over the previous year and constituting 55.4 percent of the city's total output value. The per-capita income for farmers reached 817 yuan, higher than the national average level. "This year, the total output value of the city's township enterprises is expected to reach 17 billion yuan. It will probably go to 20 billion yuan if greater efforts are pooled," said Guo Anmin, mayor of Jiaozuo and a deputy to the NPC. He said the city government is poised to invest 1.8 billion yuan to beef up infrastructure construction and improve the investment environment, gearing township enterprise development towards an export-oriented economy.

Measures to be taken

Wang Shuangxi said that in comprehensively stepping up the pace of growth of township enterprises in the central and western regions, the utmost task is to revitalize concepts and free people's thinking. Governments at the county level, while emphasizing agriculture, must concentrate efforts on the development of township enterprises and pay equal attention to the growth of collective, private, individual and joint venture enterprises. Second, each province must readjust its industrial setup, develop the intensive processing of farm and sideline products and industrial raw materials, and increase value-added products in line with resource layout and economic development. It must develop accessary products for urban industries while boosting trade and tourism. A batch of industrial districts and technically advanced large enterprises will be built to facilitate the construction of small towns. Third, the financial department of each province must provide more funding support to township enterprises and expand bank loan scale. Fourth, mature projects with solid background will be offered to foreign businesses for cooperation or the introduction of foreign funds, technology and management expertise.

Currently foreign investment zeal has gradually shifted from the south to the north, and from the east to the west. Even remote provinces such as Gansu, Qinghai and Tibet possess joint ventures. Prior to 1992, there were only 19 joint ventures in Jiaozuo City. Last year alone, contracts on another 102 were concluded. In 1992, there were a mere nine joint ventures in Luliang Prefecture, but, at the moment, another 15 are under negotiation.

Feng Qifu said the state's effort to strengthen the construction of infrastructures in central and west China has greatly supported the development of local township enterprises. A number of large infrastructure projects are either under construction or in the preparatory stage. They include the Three Gorges water conservancy project which is attracting world attention, the Xiaolangdi water conservancy project in Henan Province, the Qingbei Power Station, to be Asia's largest thermal power station, the building and electricification of several thousand km of new railways, and large telecommunications projects. Also on the agenda is the huge project of diverting the water of the Hanjiang River in Danjiangkou, Hubei Province, to north China.

Wang Shuangxi said massive east-west exchange and cooperation is also an effective approach for boosting the progress of central and western township enterprises. He said the mutually beneficial collaboration between Shaanxi Province and coastal Shandong and Jiangsu provinces has yielded fine economic returns. While Shandong and Jiangsu provide Shaanxi with funds, technology, talented personnel and sales channels, Shaanxi supplies the two eastern provinces resources in return. In the past two years, the number of such cooperative projects has reached 650. In addition, Shaanxi Province has sent tens of thousands of people to the coastal areas to learn how to effectively run township enterprises.