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Despite the global economic downtown, China's west attracted more than US$4.4 billion in contractual foreign investment in2001, with US$1.924 billion put to use. Both the figuresrepresent increases of over 15 percent.

The vast western region of China is bucking global economic trends to become a hot choice for foreign investment, according to economic indicators.

The growth rate of direct foreign investment in the region has kept rising and surpassed the national average over the past three years, according to the Ministry of Foreign Trade and Economic Cooperation (MOFTEC).

Despite the global economic downtown, the west attracted more than US$4.4 billion in contractual foreign investment in2001, with US$1.924 billion put to use. Both the figuresrepresent increases of over 15 percent.

China absorbed US$69.2 billion in contractual foreigninvestment last year, a year-on-year increase of 10.4 percent. Theused amount totaled US446.8 billion, a rise of 14.9 percent.

Foreign investment to the provinces of Shaanxi and Sichuan, andChongqing Municipality has grown by more than 20 percent annually,much higher than the growth rate of foreign investment in east China provinces, according to the first West China Fair for Attracting Overseas Investment, being held in Xi'an, capital of northwest China's Shaanxi Province.

MOFTEC statistics show that the number of foreign-funded enterprises in west China has grown by 44.6 percent annually sincethe 1990s, 14 percentage points higher than that in east China.

More than 60 of the world's top 500 corporations have invested in west China. As of 2001, the west region had used a total of 20.34 billion U.S. dollars.

Experts pointed out that although the figure is low compared with east China, it shows that west China has strong appeal to foreign investors.

Covering 56 percent of China's total land space and with a population of 300 million, the western region has a great proportion of scientific and technological personnel, and abundantlabor resources. The region also boasts very rich natural resources.

China launched a strategic campaign to develop its vast west region in the late 1999, which has already caught worldwide attention. The Chinese government has made it clear that the region will have priority in some pilot programs and in opening certain fields to overseas investors.

The current West China Fair for Attracting Overseas Investment attracted more than 1,000 businessmen from home and abroad and 150enterprises worldwide including IBM, Siemens, Kodak and Toshiba.

At present, foreign investment mainly goes into machinery and equipment manufacturing, electronic information, environmental protection, construction of infrastructure facilities, bio-medicine, textiles, high technologies and information industries in west China, said Zhou Ming, vice-chairman of the China Association for Foreign-funded Enterprises.

Porzio Mario, general manager of the Italia-Cina Commerciale ofItaly, has chosen Xi'an as the first leg for his business in China.

Mario said China's development had advanced from the eastern coastal areas to the interior in tandem with the development of the western region. "Of course, our investment strategy will change," Mario said. He cited a series of changes taking place in the western region such as the wider opening-up and marked improvements in local consumption and infrastructure facilities.

Asia Business Consulting e.K., a subsidiary of a German company,set up its representative office in west China last year. Its general manager Ralf Graefe said it was natural that foreign business people first choose west China as their investment destination, since the eastern investment market was saturated, and the cost of labor and land more expensive.

Governor Cheng Andong, of Shaanxi Province, said that west China had been brought into the global economic arena after China joined the World Trade Organization (WTO). Cheng said provinces, municipalities and autonomous regions in west China acted strictlyin accordance with the commitments of the Chinese government for entry into the WTO, to eliminate investment barriers.

"There is no doubt that west China is promising and we think highly of its future," said Berniel Ripooll, a member of the Australian Federal Parliament, who led five Australian enterprisesto the current West China Fair for Attracting Overseas Investment.