Misplaced priorities

"The economic growth of the western hinterlands for the past decade has mainly been powered by huge infrastructure investments and the exploitation of natural resources," said Chen Yao, a regional economic development expert with the Chinese Academy of Social Sciences.

"Such a method might have boosted the local GDP for a short time, but it won't necessarily improve the livelihood of the people much and is unsustainable in the long run."

Chen said that for the past 10 years, especially the recent five years, the ratio of investment over total local GDP of the western area has remained higher than in China's other major economic regions.

These big investments are channeled into the local infrastructure and resources exploitation projects either through State-owned enterprises or as fiscal spending, and seldom, if ever, involved private companies.

In 2008, investments from State-owned sectors accounted for 37.7 percent of the total in the western area, which is 10 to 16 percentage points higher than that in each of the other major regions, according to Chen.

"Few industries which have made full use of the local resources and technological advantages were built up in the western area over the past decade, and large-scale private investments did not follow through either," said Chen.

"Policymakers need to nurture internal growth in the western area for the next round."