The western ethnic region is that part of China where there is a concentration of eth-nic minority nationalities .This includes the Tibet Autonomous Region , Xinjiang Uygur Autonomous Region, Ningxia Hui Autonomous Region , Inner Mongolian Autonomous Region , Guangxi Zhuang Autonomous Region , and three other provinces where the minority nationalities are relatively con-centrated , namely Yunnan , Guizhou and Qinghai . The circulation industry is an important part of the“tertiary sector of industry”.Circulation refers to the process in which the products of the producers reach the consumers via wholesalers and retailers . Broadly speaking , the circulation industry is the sum total of all the commercial relations of the commodity owners .It is the collection of the flow of products, logistics, flow of information and flow of capital, including wholesale, retail, logistics, catering, information, financial industries etc . However , the circulation industry , in a narrow sense , only refers to the wholesaling and retailing industries .The circulation industry is the basic in-dustry in the national economy; it is the base for external exchanges , for urban development , and for the ordinary life of the general public .The cir-culation industry ’ s role in promoting the national economy is greater than the national economy ’ s role in promoting the circulation industry . Developing the circulation industry could im-prove the economic development and social stabili-ty of the western ethnic region .Firstly, it can meet the needs of the people ’ s daily life and promote economic development .Secondly , it can popular-ize the principles of “contract culture” and market economy.Thirdly, it can increase the employment rate and promote social stability .Fourthly, it can promote the population mobility rate; increase ex-ternal economic exchange; and promote the eco-nomic position of the western ethnic region . Through commercial exchange and co -operation, there will be coordination , distribution of responsi-bilities, and complementary advantages between the western region and the eastern region , and e-ven the world . By combining the commercial skills, commodities, information, capital, and technical personnel of the eastern region and other countries with the western region , there will be a close co -operation between the two sides .Ac-cordingly, the economic gap between the western region and eastern region will be reduced , and close economic relations between the two regions will be established.As a result, the two regions will reach a common development and prosperity , which will definitely contribute to the national har-mony and stability . The development of circulation industry in the western ethnic region still lags behind .In terms of per capita social total retail sales , the western re-gion lags far behind the east region .No matter if we judge from the potential competitive power or the real competitive power , the provinces in the western region are listed last in the country , and they lack competitive power in the circulation in-dustry.The reasons are as follows: first, the poor natural conditions of the region objectively prevent development of the circulation industry .If seen from the location of the region , the living condi-tions surrounding the western ethnic region are not good , and natural disasters frequently occur .The poor natural conditions objectively increase the dif-ficulties in constructing circulation industry facili-ties, and thus , influence the development of the circulation industry .Second , the social system is growing slowly , and, for a long time it did not payattention to the basic position of the circulation in-dustry .Enterprises and institutions on various lev-els do not notice the “pull” role of commercial de-velopment for local economic development , and they have not yet built up a framework for taking the circulation industry as a leading industry . Hence, the enterprises’ concept of logistics is not strong.Third, investment in the circulation indus-try is not big, and the logistics’ facilities lag be-hind.Fourth, the level of management of the cir-culation industry is low , and it lacks related tech-nical personnel and management personnel in the circulation industry .It is difficult for the western region to gather the technical personnel and man-agement personnel .As for the workers related to this industry , most of their educational level is low, and there is less chance for them to get re -education and training . Taking aim at the lagging situation of the cir-culation industry in the western region , one should design related strategies for development .Firstly, the government should pay attention to the impor-tance of the circulation industry in the national e-conomy;the contribution of the circulation industry to the growth of the national economy , employment and taxation, and, then, build the concept that the circulation industry is the basic industry , and provide preferential policies to develop the circula-tion enterprises .Secondly , one should stress the construction of a hardware and software investment environment for the circulation industry .The hard-ware environment mainly refers to the basic facili-ties, including water , electricity, transportation, logistics distribution station , etc.The software en-vironment mainly refers to setting up information platforms and the entrance of capital loans .Moreo-ver, entrance of various stocks , the flow of funds, and the entrance of the financial industry for the development of the private economy are also very important.Thirdly, we should develop trade by va-rious forms and means .In terms of basic goods , we should build up a material -reserve system , and emphasize the function of private capital and the development of foreign enterprises .Fourthly, one should make a reasonable plan for the distribu-tion of the circulation industry network .Through making reasonable plans , the balance between the supply and demand of commercial facilities could be ensured .Fifthly, the government should rein-force building the capacity of both the technical personnel and management personnel in the circu-lation industry .The government should set up spe-cial funds as well as special institutions for train-ing.One should either invite experts to come to provide training , or send people out to get train-ing.In this way one can cultivate a large number of technical personnel and management personnel in the field of the circulation industry as soon as possible .Sixthly , one should vigorously develop commercial circulation which has minority national-ity characteristics .The western region has splendid natural resources , colorful minority nationality cul-tures, and unique landscape .Hence, the develop-ment of commercial circulation should integrate these advantages .