The central government will introduce a new resource tax in western China and speed up construction of a modernized industrial system there, officials said after a conference about the development of west China.
At the meeting, Chinese President Hu Jintao said efforts must be undertaken to accelerate infrastructure construction and rural development in western China. China must also enhance environmental protection and upgrade the industrial sector by revitalizing enterprises and traditional industries with high technology.
With the guidance from the government, the new energy sector in the western regions will achieve rapid development and become an important energy base for the country, industrial experts believe.
The 5 percent new resource tax on sales of crude oil and natural gas, which comes with a shift from current taxes based on output, is aimed at saving natural resources by increasing consumption costs, and it will also increase revenue of local governments.
In June, China's Ministry of Finance introduced the new resource tax in Xinjiang Uygur Autonomous Region.
As the western regions have most of the country's natural resources, the resource tax reform will push enterprises to invest more in the research and development of new energy.
Higher revenues to local governments will also benefit the adjustment of the economic and energy structure in west China, where there are large natural resources as well as abundant sources of new energy.
An official from Ngari Prefecture, Tibet, said that with 2,500 to 3,800 of annual sunshine hours, the potential for solar energy there is highest in the world. Ningxia, Gansu, Xinjiang and Tibet have the most abundant solar energy resources in China.
In addition, west China's Gansu Province also has huge wind power potential. It is planning to build itself into a production base of wind power equipment.