The Fortune 500 companies have increased their investment in East China¡¯s FujianProvince.
They are lured by the province¡¯s efficient and open government and optimized investment climate.
According to Fujian¡¯s Foreign Trade and Economic Co-operation Bureau, about 80 leading transnational corporations, including Kodak, ABB, Wal-Mart, Boeing, General Motors, Dell and Siemens, had invested in 102 projects in the province by the end of 2004. The total utilized overseas investement of the projects have recorded US$2.1 billion.
Meanwhile, 17,000 other overseasfunded companies have capitalized on projects in Fujian.
The world leading personal computer maker Dell has signed an agreement with the city government of Xiamen, the only special economic zone in Fujian, for a new manufacturing plant.
The construction of the new plant, located in the Xiamen Torch High-Tech Zone adjacent to the airport, began in April. It is due to open early next year.
The completion of Dell¡¯s second plant in China will boost the company¡¯s annual production capacity to 10 million units from the current 4 million, making Xiamen the largest computer manufacturing centre in Chinese mainland¡°It¡¯s the effi cient, practical and open government that reinforces Dell¡¯s investment confi dence,¡± said Li Yuanjun, general manager of Dell China, adding that new investment is possible when business fl ourishes.
The new investment decision was made shortly after it set up the first Asia-Pacific directing centre
for enterprise services in Xiamen last September to provide technical support to clients in China and North Asia.
Dell first came to Xiamen in 1998, and its first factory opened in 2001.
Overseas-funded companies such as Dell were extremely active in adding to investment last year, and the trend is continuing.
Official f igures showed that overseas-funded companies in Fujian invested a total of US$1.35 billion capital last year, an increase of 32.2 per cent from 2003.
Companies that operate solely by overseas funding outperformed other categories by injecting nearly US$1.1 billion, or 78.7 per cent, of the new investment.
The new investments from
The film production line of Kodak(China)Co Ltd
existing overseas-funded companies accounted for 25.2 per cent of the newly signed contractual overseas capital of the province in 2004, up 3.7 percentage points from a year earlier.
The local governments in Fujian pledged to improve the environment to attract more overseas investment.
The completion of several major infrastructure projects ¨C including the new facilities of Houshi Electric Power Plant in Zhangzhou, the sea route for vessels of 100,000 deadweight tons of Xiamen Bay and Liancheng Airport ¨C are just part of what the province is doing.
The road network was also upgraded with the Sanfu Highway and the Zhangzhou section ofZhangzhou-Longyan Highway opening through last year.
So far, the total length of highways in Fujian has surpassed 1,000 kilometres, and the main structure of the road network has taken shape.
More convenient transportation will accelerate the development of the mountainous regions, opening new investment opportunities to overseas investors, Fujian government officials said.
Also, Fujian intends to take advantage of its proximity to TaiwanProvince across the Straits to offer ¡°an open, harmonious and prosperous economic zone on the west bank of the Strait.¡±
By taking the country¡¯s regional economic layout and the economic globalization into account, Fujian has re-positioned itself and sought co-operation from the two neighbouring booming regions, the Yangtze and Pearl river deltas.
Encouraged by the province¡¯s new blueprint, overseas investors moved to the hotbed to explore new investment opportunities.
Contracts were signed on about 2,280 projects with direct foreign investment in the province
last year, involving US$5.37 billion, up 12.6 per cent from a year ago. Of the contractual capital, about US$4.75 billion has been actually used, up 16.5 per cent over the previous year.
In the first three months of this year, the province attracted 557 new investment projects worth US$1.5 billion. Of that f igure, US$780 million has been used, an increase of 58 per cent over the same period a year ago.
The government officials said the province has benefited from the foreign investment aside from the capital inflow.
The overseas-funded investment, especially from transnationals, has had a positive impact on the province¡¯s industrial restructuring, industrial quality, employment and development of new technology, they said.
Manufacturing in Fujian has been developed to the point that the low-tech, labour-intensive industries have moved out in favour of hightech industries.
¡°We still have the labour advantage, and they are taking on high technologies to become skilful workers, which laid a sound foundation for the province to develop high-tech industry,¡± one expert said.
The investment of the transnationals will also give an impetus to local industries with which they deal.
For example, the arrival of the Taikoo Aircraft Engineering Co in Xiamen soon brought in a number of such big names of the industry as Boeing and GM. They eventually boosted the aviation maintenance industry in the city.
The entry of German retailer giant METRO AG also helped the local retail market thrive.
Of the approximately 20 stores in China, METRO has two in Fujian, one in Fuzhou and one in Xiamen.
The main reason for Fuzhou introduced METRO into the local market was that the advanced operation and service philosophies of the international retailing leader energized the local market with more competition.
As expected, the entire market was soon reshuff led. Many small supermarkets went bankrupt, and other local supermarkets matured by adopting new operational ideas.
As a result, the industry in Fuzhou became stronger.
METRO has also gained a firm foothold in the booming Fuzhou retail market by attracting more than 70,000 members since the store was opened in July 2000.