Shaanxi attracts HK investors for US$23.6b co-operative projects

PUBLISHED : Friday, 28 October, 2011, 12:00am
UPDATED : Friday, 28 October, 2011, 12:00am


Shaanxi province has signed co-operative agreements in Hong Kong for 63 projects valued at US$23.6 billion, including 21 projects reached yesterday for Qujiang, a new district in the provincial capital Xian.

Hong Kong has been the biggest foreign investment source for Shaanxi and has invested in more than 2,300 projects in the province.

So far eight Shaanxi-based companies have listed on the Hong Kong stock exchange, and they raised a combined HK$4.6 billion.

Shaanxi governor Zhao Zhengyong said he hoped his province and Hong Kong could have closer co-operation in the fields of finance, environmental protection, modern logistics and other service sectors.

At yesterday's ceremony, the province introduced two locations to potential investors - Xian-Xianyang and Yulin.

It is unclear whether all the co-operative agreements represent final contractual funding commitments.

Xian was an imperial capital for 1,180 years for several dynasties and was the first city in history to have a population of one million. But today, the city has fallen far behind its southeastern coastal counterparts. The gross domestic product per capita in the province is US$4,100, while the total GDP ranks 17th among the nation's 33 administrative divisions.

Shaanxi hopes to transform itself into a hub of western China - although there are competitive rivals in the area, including Chengdu and Chongqing.

Xian will invest 900 billion yuan (HK$1.1 trillion) to promote key projects including infrastructure, resources and tourism during the 12th five-year plan to 2015. That amount would be 4.3 times the funds injected during the previous five years, according to local officials.

Another investment recommendation by Shaanxi officials is Yulin, a backwater city in the north of the province.

Lu Zhiyuan, the acting mayor, said that in the past 10 years Yulin's GDP had been growing at 19.7 per cent annually.

'The total GDP is expecting to jump to US$450 billion in 2015 from last year's US$175 billion,' he said.

Lu said resource-rich Yulin had 146 billion tonnes of verified coal reserves, an estimated 6 trillion cubic metres of natural-gas reserves and an estimated 600 million tonnes of oil reserves.

The city is looking for investment in manufacturing, agriculture and resources projects.

Shaanxi is competing with other provinces in the west as manufacturing investments in coastal regions, where costs and wages have risen sharply, are moving inland.

Relocating factories inland is also part of Guangdong province's policy to upgrade its industries.