Multinationals eye China's west
(People's Daily)
Updated: 2005-04-24 14:45

With rich resources and great market potential, western China has attracted the attention of an increasing number of multinational corporations.

The Foreign Investment Office of Gansu Provincial Commerce Bureau said Saturday that beginning in March this year renowned multinational corporations such as BHO-Billiton, the global leading mining firm based in Australia, Carrefour, world's second largest retailer, and Veolia, the global leading water affairs firm, have traveled to Lanzhou, capital of Gansu province, in search of business opportunities.

It is reported that Wal-Mart, the world's leading retailer, also has the intention to open outlet in Lanzhou.

Last year, Coca-Cola invested 12 million US dollars in a tinnedproduction line in Lanzhou, targeting 57 million consumers in Gansu and Qinghai provinces and the autonomous regions of Ningxia,Xinjiang and Tibet, all in western China. Denmark-based Carlsberg Brewery Limited, together with a foundation for industrialization in developing countries, invested 30 million US dollars to set up the Yellow River-Carlsbery beer company in Lanzhou.

Shao Hongda, director of Lanzhou City Foreign Investment Bureau,said that Lanzhou is only one of the places multinational corporations have investigated for business opportunities in western China.

Other west China cities such as Xi'an, Chengdu and Chongqing all have become investment destinations of multinationalcorporations.

Frequent visits by multinational corporations have convinced local analysts that world's leading firms are expected to "speed up" their investment in western China.

Wang Xu, deputy head of Gansu Provincial Commerce Bureau, said that the trend has much to do with changes in China's investment atmosphere in recent years.

She said, power crisis, tensed land use and rising production cost, resulted from growing prices of petroleum, iron and steel, coal and other raw materials, and higher market saturation in the eastern region have driven many businesses to move west.

China's strategy to develop its vast western region also has attracted many world's leading businesses to seek business chancesin western China, She said.

Li Guozhang, a professor with the Western China Development Research Institute under Lanzhou University, said that multinational corporations are paying more attention to long-term profits.

"Although western regions are temporarily weak in infrastructure facilities, local rich resources and great market potential are attractive to foreign investors," Li said.

Improving infrastructure facilities and comparative industrial strength are the major factors that attract multinational corporations, said Wei Qizhu, an official with the investment office of Gansu Provincial Commerce Bureau. In Gansu, one of China's most economically-underdeveloped provinces, the total length ofexpressways already open to traffic or being built have topped 1,000 kilometers, Wei said.

He said, western China boasts advantages in bio-medicine, petroleum and natural gas exploration, oil-refining and chemical industries.

Professor Li Guozhang said, western regions need to further improve the local investment environment to attract more multinational corporations.

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