China yesterday set the stage for more foreign investors to enter western and central China.

Mineral resources exploration, agricultural development and the service industry are the investment priorities listed by the government.

Foreign investors are encouraged to pour their money into the expanded sectors, some of which used to be off-limits.

For example, they can invest in tourism agencies and building the tourism infrastructure in the region.

The measures are included in an updated investment directory for foreign investors to enter western and central China made public by National Development and Reform Commission and the Ministry of Commerce.

Investors will soon be able to access the directory, which includes 267 investment items encouraged by the Chinese Government, at the commission's official website, www.NDRC.gov.cn.

The new version of the directory will take effect on September 1.

An NDRC official surnamed Fu said the idea is to spur development of China's western and central regions.

"We have allowed overseas investors more market entry opportunities," said Fu, adding that the opening-up is in line with China's commitment to the World Trade Organization.

Other than government budgets, the main source of development financing is equity provided by firms and individual entrepreneurs, as well as loans channeled through the financial system.

Foreign investors who engage in energy, transportation and city infrastructure construction such as coal, oil, natural gas, electricity, railway, highway, port, airport, city road, the disposal of waste water and the disposal of waste which requires large input and long return periods may be allowed to expand their business scopes.

"We even allow them to set up tourism agencies and develop scenic zones," said Fu. "The rapid opening up for western and central China is aimed at facilitating foreign capital inflow."

He said "encouraged" industries will enjoy preferential treatment in taxation and land use in accordance with Chinese laws and rules.

Aiming to reduce the huge disparity between west and east, China launched its "Go West" campaign with great fanfare in 1999.

But the gap between China's west and east, instead of shrinking, is growing.

Per capita GDP increased from US$498 in 1998 to US$663 in 2002 in the western region. But the eastern region has witnessed a per capita GDP increase of 41 per cent from US$1,212 to US$1,704 during the same period.

Investors and governmental officials praised the government's approach to invigorate China's western and central region.

Zhong Dingxu, general manager of a Sichuan-based Deyue High-tech Seed Company believed the government's continuous effort to support agriculture in the region is encouraging.

"The new directory has placed more emphasis on grain seed cultivation and food processing and I think more foreign investors will become my partners," said Zhong, whose company has invested much in hybrid rice research and exported at least 1,500 tons of rice seed to Viet Nam and Myanmar annually.

Tong Xiaoping, vice-mayor of Chongqing Municipality yesterday vowed to turned the city into a magnet for foreign money by improving the investment climate.

She said both overseas investors and enterprises from China's developed coastal areas are encouraged to invest in the southwestern city.

"We want not only dollars, but also RMB to marry with local resources."

She expressed the commitment at a press conference held yesterday in Beijing. China's top 500 companies will participate in a forum organized by her government and the China Federation of Enterprises in Chongqing from September 5 to 6.

"That's a chance for us to show our investment environment," said Tong.

Tong said Chongqing is expected to become an auto and auto parts production base and high-tech centre in western China.

In addition to the overseas investment, the government will increase its investment and long-term funding in agriculture, ecology, social security, technology, education and culture and relics protection in the western area, said Tong.