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China to Set Up Special Economic Zone in Tibetan Capital

[WTN-L World Tibet Network News. Published by The Canada Tibet Committee. Issue ID: 01/11/06; November 6, 2001.]

BEIJING, Nov 5 (AFP) - The Chinese government plans to establish a special economic zone in Lhasa in an effort to attract more foreign investors to the capital of Tibet, state media said Monday.

The Lhasa economic and technological development zone will offer incentives such as 15 percent income tax instead of the usual 33 percent rate, the China Daily said, citing the state-run China Association of Development Zones.

The paper did not indicate what kind of industries would be tempted to set up shop in Tibet, with its small population, poor infrastructure and harsh climate.

The zone is set to become the 50th of its kind and marks the latest in a series of moves to tie the remote area's economy closer to China.

The central government said earlier this year it would invest around 3.8 billion dollars in 117 construction projects in Tibet.

Beijing has also launched an ambitious railway project to connect Tibet with western China.

The 1,118-kilometer (650-mile) railway, the first linking Tibet with the outside world, will extend from Lhasa to Golmud, a city in northwest China's Qinghai province.

China seized control of Tibet in 1950 in what it later described as a "peaceful liberation".

Beijing has ruled the Himalayan region with an iron fist since, with human rights groups alleging widespread human rights abuses and attempts to destroy Tibetan culture.

Rights groups have expressed concern that attracting large numbers of outside workers to Tibet will further swamp the local culture.

The China Daily also said Monday a similar zone was being planned for Lanzhou, capital of China's impoverished northwestern Gansu province.

Observers have voiced concerns that China's various categories of special economic zones will no longer have the same importance as in the past once the country enters the World Trade Organization.

Chinese WTO membership, expected to receive the green light from the trade body within the next few days, will mean that preferential policies such as the lower income tax rate will eventually have to be phased out.

But according to the paper, the China Association of Development Zones is not concerned since preferential policies are expected to stay in force for another "three to five years."

Just as important, the zones will continue to have comparative advantages in terms of better infrastructure, regulations and services, the association said, according to the paper.

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