Multinationals turn to China's west
(Xinhua)
Updated: 2006-04-12 15:12
The U.S.-based Applied Materials Inc. clinched a deal this week with the
high-tech development zone in Xi'an to build a global R&D center in this
capital city of northwest China's Shaanxi Province.
The American company
will invest US$255 million into the project, designed to be another global tech
center outside its headquarters in the United States, according to the
contract.
The project is of great significance for the company's future,
Michael R. Splinter, chairman and CEO of the Applied Materials, said at the
signing ceremony.
The contract also means great news to Xi'an, the
bridgehead of China's vast western part.
Currently, 83 companies of the
Fortune 500s have established their presence in the city, up from 24 a year
earlier.
"The influx of more leading global businesses showed the
western region is becoming a more attracting destination for foreign
investments," Wang Xuedong, head of the Xi'an Development and Reform Commission,
told Xinhua.
China launched the western development program in 2000 to
narrow the economic gap between the region and the country's east.
Preferential policies, abundant energy supply, and cheap land and labor in
the region all meant luring opportunities to overseas investors, but for quite a
long period of time, transnational corporations took a wait-and-see attitude
towards the development drive.
Now, however, the situation is changing,
Wang said.
More than 3,000 business people from 45 countries and regions
attended an investment and trade fair between China's west and east held in
Xi'an from April 6 to 10.
They brought with investment contracts worth
US$2.43 billion to the fair. Most of the investment will go to the west.
Statistics from the Ministry of Commerce showed in the first two months of
this year, the western region approved the establishment of more than 200
overseas-funded enterprises, and actually used 276 million U.S. dollars of
overseas capital, up 51 percent year-on-year.
A latest poll found that
65 percent of foreign companies surveyed intended to expand presence at a normal
pace in western China in the coming five years, while 22 percent chose to expand
faster. None said they would withdraw from the region.
According to an
official from the Ministry of Commerce, Industry and Energy of the Republic of
Korea (ROK), the country has encouraged enterprises to invest in China's western
region since 2002 by way of organizing inspection tours and attending trade
fairs in the region.
A number of prestigious ROK companies, including SK
Teletech and Korea Resources Corporation, have set foothold in the region.
The consumption market in the west, which used to be neglected, is also
attracting interest of foreign investors. After such retail giants as Metro and
Carrefour entered Xi'an, Wal-Mart, which has opened seven malls in Yunnan,
Guangxi, Guizhou, Chongqing and other western areas, is planning to open two
stores in the city within the year.
Wei Houkai, an economist with the
Chinese Academy of Social Sciences, said that an investment boom by
transnational corporations is predictable in the western region as the huge
market weighs a lot in the overall consideration for their further development
in China.
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