China is setting the stage for more foreign investors to enter western and central China.

The country hopes to see funds from abroad go into a number of newly expanded sectors, some of which used to be off limits to foreign investment. Mineral exploration, agricultural development and the service industry are government investment priorities.

Such measures are included in an updated directory for foreign investors looking to enter western and central China. The directory, issued by the National Development and Reform Commission (NDRC) and the Ministry of Commerce, will go into effect on September 1.

Investors will soon be able to access the directory, which includes 267 government-promoted investment areas, at the commission's official website, www.ndrc.gov.cn.

An NDRC official surnamed Fu said the move is part of China's effort to develop its western and central regions.

"We have allowed overseas investors more market entry opportunities this time," said Fu. Market opening is also in line with China's commitment to the World Trade Organization, he noted.

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

Foreign investors that engage in energy, transportation and city infrastructure construction, including coal, oil, natural gas, electricity, transportation, waste water treatment and waste disposal -- all of which entail large input and slow returns -- may be allowed to expand their scope of business.

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

Investors in "encouraged" industries will enjoy advantageous treatment in taxation and land use in accordance with Chinese laws and regulations.

Aiming to reduce the huge disparity between west and east, China launched its "Go West" campaign with great fanfare in 1999. But the regional development gap, instead of shrinking, is widening.

Per capita GDP rose from US$498 in 1998 to US$663 in 2002 in the western region. But the eastern region witnessed a jump of 41 percent, from US$1,212 to US$1,704 during the same period.

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

"The new directory places more emphasis on grain seed cultivation and food processing and I think more foreign investors will become my partners," said Zhong. His company has invested substantially in hybrid rice research and exports at least 1,500 tons of rice seed to Vietnam and Myanmar annually.

Tong Xiaoping, vice mayor of Chongqing Municipality, vowed to turn the city into a magnet for foreign money by improving the investment climate. She encouraged both overseas investors and enterprises from China's developed coastal areas to invest in Chongqing.

At a press conference held Tuesday in Beijing, Tong said that China's top 500 companies will participate in a forum organized by the Chongqing government and the China Federation of Enterprises on September 5 and 6.

"That is a chance for us to show our investment environment," said Tong. She said Chongqing is expected to become an auto and auto parts production base and high-tech center in western China.

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

(China Daily July 28, 2004)