West China is now a desired destination for foreign investors due to its improved infrastructure, said experts at an ongoing forum.
Investment in west China was the main topic at "Go West: Accessing New Opportunities Forum", which was held by Euromoney Conferences from April 25 to 26 in Chongqing.
China has attracted about US$10 billion of investment with an average growth rate of 20 percent since 2000 when China launched going-west strategy, according to Deng Zhan, deputy director general of foreign investment administration under the Ministry of Commerce.
Deng said nearly 100 of the top 500 global companies have branched into this region. Last year, 2,000 foreign-funded enterprises set up business there.
China's west, which includes 12 province, municipalities and autonomous regions, is home to nearly 30 percent of total population left behind in development. The region is known for its lagged infrastructures though it abounds in ample mineral resources, such as oil and natural gas, in a vast area covering 60 percent of the territory.
"My previous trips have taken me to China's eastern region and coastal cities, where a robust economy has attracted some 85 percent of the foreign direct investment in China," said William Parrett, global chief executive officer, Delloitte Touche Tohmatsu.
Under a banner that western development starts with roads, China has invested more than 850 billion yuan (US$102 billion) on 60 key projects of airports, rail lines and pipelines along with power stations, environmental controls, and broadband installation.
Dung Van Anh, chief executive officer of Lafarge Cement China, said he is satisfied with the current investment environment on the whole but has deep concerns about the shortage of power. He believes this is a disadvantage towards attracting investment from the overseas and will eventually be resolved via infrastructure improvement.
As more regions and countries open up and reform their economies, Carl Bildt, former prime minister of Sweden, said competition for foreign investment is increasing. This applies also to west China.
In addition to establishing communication and transportation facilities, participants said corporate governance, the rule of law and financial supervision must all be present before the West becomes an inviting place for foreign investment.
Brendan King, vice president and chief executive officer, Greater China, Bank of Nova Scotia, said that a sound supervision is an aspect of a variety of infrastructures.
Responding to the opinion, Dr. Wang Zhaoxing, director general of Banking Supervision Department III under China Banking Regulatory Commission, vowed to open green channel for foreign banks' strategic alliance with domestic financial institutions.
Experts also said that China needs to build an environment to encourage skilled people not only to invest in the west but also settle there. Offering them a variety of infrastructures working together in education, health care, transportation, and housing will help them settle down and help western China transform itself into an incubator for intellectual capital, said the experts.
Looking ahead, Kunho Cho, managing director and head of Asia Pacific Investment Banking of Lehman Brothers, is optimistic that China's western development strategy will go well and gain a success, which will be provide more opportunities for global investors.
(Xinhua News Agency April 27, 2005)