Government boosts regional investment

China's coastal regions have benefitted from extensive foreign direct investment (FDI) since the country began to open up. But rising labour costs have caused companies to rethink the location of their bases, especially those engaged in heavy-manufacturing industries.

In order to retain this foreign capital and develop the central and western regions, the government has been pushing investments inland. One way of achieving this goal is through the Catalogue for Foreign Investment in the Dominant Industries of the Central and Western Regions (2013 Revision) (国家发展和改革委员会、商务部中西部地区外商投资优势产业目录 (2013年修订)), which was issued by the National Development and Reform Commission and the Ministry of Commerce on May 9.

“The main purpose of the Catalogue is to develop the local economy of the central and western regions by utilising the funds, technologies, equipment and other resources brought by foreign investors, so as to keep its competitive edge and prevent from foreign investment from moving to the Philippines or Vietnam” said Helen Haixiao Zhang, a partner with Zhong Lun Law Firm in Shanghai.

Industrial and service sectors

The Catalogue places great emphasis on labour intensive industries like manufacturing of digital televisions and energy saving refrigerators. It also considers service industries.