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LYNN NEARY, host:

China's economy is growing rapidly, but some of that growth is not what it appears. In the Himalayan region of Tibet, for example, the economy's been growing at more than 12 percent annually, yet it remains one of China's poorest regions.

NPR's Anthony Kuhn reports from Lhasa.

(Soundbite of water flowing)

ANTHONY KUHN: The icy blue waters of the Lhasa River have nurtured Tibetan civilization for centuries. Now they're about to be harnessed to produce power.

(Soundbite of rock being shoveled)

KUHN: Work crews consisting of Tibetans and ethnic majority Han Chinese are constructing a dam on the river, building the embankments one stone block at a time.

Unidentified Man #1: (Foreign language spoken)

KUHN: Once its turbines start spinning later this year, the dam will provide electricity to much of central Tibet, including the capital Lhasa. It's heart of the roughly $2.5 billion that Beijing pumps into Tibet each year, mostly in the form of infrastructure projects.

The dam is supposed to benefit residents downstream, including 60-year-old farmer Gesang Quzhen. Sitting in her living room, she recounts her road out of poverty.

Ms. GESANG QUZHEN (Farmer, Tibet): (Foreign language spoken)

KUHN: When I have some time to myself, she says, I often reflect on how life has changed. In past, we worked for others without pay. Now we farm our own land and we pay no taxes on our shop. As a young girl, she says, I could see how hard my parents worked.

Quzhen was still young when the Chinese government took control of Tibet in 1951 and ended its feudal system. Quzhen's parents were thralpas(ph), landless serfs who worked on a feudal lord's manor.

Today, Quzhen makes $2,500 a year from her roadside shop and another $350 from her one-acre plot of barley and potatoes. She says that despite all the government construction over the past decades, most of what she's achieved in life she's done with her own hands.

Ms. QUZHEN: (Foreign language spoken)

KUHN: The government has helped us build houses, she says, and we can seek them out if we need assistance. But as for us, we've worked very hard, so we haven't needed much help from the government.

Tibet as a whole is not so self-sufficient. Tibet has the lowest economic output of any region in China, and a million residents in Tibet are still below the poverty line of $150 in annual income.

China's critics and Tibetan exiles say the region is poor because Beijing practices neocolonialism, stripping Tibet of its resources and neglecting its people's welfare.

Zhang Younian rejects such accusations. He's the deputy director of Tibet's main economic planning agency.

Mr. ZHANG YOUNIAN (Deputy Director, Tibet Development and Reform Commission): (Through translator) Besides exempting Tibet from all taxation, Beijing provides 90 percent of Tibet's government expenditures. So there's no question of Beijing taking money out of Tibet. Given our current economic circumstances, there's not much money to take out.

KUHN: Zhang adds that China strictly controls the extraction of Tibet's rich mineral resources.

It's no secret that Beijing's spending in Tibet is partly intended to stabilize its border regions. Lhasa-based economist Wang Taifu points out that it's been this way for centuries and remains the case today.

Mr. WANG TAIFU (Economist, Tibetan Academy of Social Sciences): (Through translator) If the central government did not make huge investments in its border regions, the income gap between these regions and the coastal areas would become too big and Beijing would have no way to insure peace and stability.

KUHN: The problem now, he says, is that Tibet has become too dependent on Beijing's infusions of money. Wang recommends that Beijing concentrate on helping Tibet build its own economic capacity. He says it should spend less on infrastructure and more on education and rural development. Otherwise, the widening gap within Tibet between urban and rural incomes could scuttle any attempts to bankroll stability.

Anthony Kuhn, NPR News, Lhasa.

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