Since the early 1950s the State has been giving special support to Tibetan economic development. It has allocated large amounts of financial subsidies, subsidized special projects and invested in key construction projects. It has also sent a large amount of material aid to Tibet. Since the beginning of the 1980s, such special aid has been increasing every year. The Central Government has allocated 1 billion yuan in financial subsidies to Tibet every year. It has also arranged for State departments and other provinces, municipalities directly under the Central Government, and autonomous regions to give Tibet manpower and material, financial and technological aid, in an attempt to bolster the Tibetan economy and improve the people's livelihood. From the early 1950s to 1999, the Central Government spent more than 40 billion yuan in Tibet on financial subsidies and investment in key construction projects.

Since 1980 the State has directed a looser policy towards farmers and herdsmen in Tibet allowing them to cultivate their own economic growth. Land was distributed to the households for independent management, a policy which would remain unchanged for the extended future. Livestock were also raised by the households as private ownership, and this is a long-term policy. Farmers and herdsmen are exempted from taxes on farming and animal husbandry. Collective enterprises and individually run industrial and commercial enterprises producing daily necessities for Tibetans are exempt from industrial and commercial consolidated taxes. Farmers and herdsmen and collective enterprises that sell or swap agricultural, animal husbandry and sideline products or handicrafts are all exempted from taxes.

In the future the State will continue to implement preferential policies in Tibet regards finance, taxes, investment, price subsidies, foreign trade, enterprise reform, agriculture and rural programs. The Central Government's policy for the fiscal subsidization of Tibet takes two forms. First, starting from a decided base quantity subsidies will increase progressively by set amounts. Additional aid will be allocated for special projects. Second, taxation will be consistent, changing as appropriate to adapt to the circumstances, but remaining light and simple in form. The State in particular supports large and medium-scale projects involving energy, transportation and telecommunications and social development projects. If the Central Government makes a major move to regulate prices with the result that prices rise substantially in Tibet, the government will supply Tibet with offsetting subsidies. The State has a relaxed policy towards foreign trade in Tibet, opening wide so as to speed development. Individuals are encouraged to make use of hitherto uncultivated land and wasteland for use as croplands, pasture or by planting trees. Maintaining the premise that all land, including grassland, belongs to the people as a whole, the policy states that whosoever develops and manages land shall enjoy the benefits thereby produced. Such land use rights are heritable and the policy will continue for a long time to come.