Mumbai: China has allowed Tibet and Xinjianj to forge trade ties with neighbouring countries, including India, as it launched a new five-year plan aimed at sound and faster economic growth in the underdeveloped western regions.

The State Council, China''s cabinet, presided over by the premier Wen Jiabao at its executive meeting, approved the 11th five-year plan for the western region for 2006-2010 period on December 8.

China''s western region covers the six provinces of Gansu, Guizhou, Qinghai, Shaanxi, Sichuan and Yunnan and four autonomous regions of Guangxi, Inner Mongolia, Ningxia, Tibet and Xinjiang and Chongqing municipality.

China aims to achieve new breakthroughs in infrastructure and ecological protection in the five-year period, including improvements in transportation network and water conservancy facilities in its western region.

The development strategy for the western region, launched in 2000, aims to boost economic growth in the impoverished region by encouraging investments. The plan also focuses on rural development of the west to raise income of farmers and herders, who account for a majority of the population in the region.

While increasing government spending in the West, China will simultaneously make efforts to further open up the region to foreign investors and develop trade with neighbouring nations.

China is also encouraging industries in the developed eastern regions to move to the West.