Pudong, the focus of Shanghai's foreign-investment strategy, is cutting the cost of land use for investors in a bid to attract more high-technology and capital-intensive companies. 'Land cost is relatively high in Pudong,' Pudong New District Administration deputy director Hu Wei said. 'We hope to lower the initial cost of investment by tackling this problem and giving investors more flexibility in working out land use methods,' he said. Depending on the kind and size of project, land cost may account for 10 to 30 per cent of initial investment. Analysts said Pudong's land prices were generally higher than those of competing industrial parks, forcing some investors to set up elsewhere. Mr Hu said the lowering of land cost would at most narrow the gap, but he said it was difficult for prices to fall below those of competitors because of Pudong's better supporting infrastructure. Instead of having to pay out a lump sum for the rights to use the land - as was the past practice - foreign investors could now opt to pay an annual rental fee. 'At the same time, depending on the projects, investors may have the flexibility to negotiate the allowable term of land use,' he said. Land for industrial uses generally are granted a 50-year lease. For key projects setting up bases in Pudong's industrial and free-trade zones, authorities could offer preferential terms for land-use rights. Land-cost rebates may also be considered for manufacturing companies whose technological renovations result in specific projects. The flexible land policy is part of a package of preferential measures Shanghai authorities have worked out to improve Pudong's investment climate to woo big names in manufacturing. The former piece of farmland to the east of Huangpu River is being touted as Shanghai's emerging business district, and holds the key to its role as the Yangtze River Delta's growth engine. By July 31, investors from 63 countries and regions had invested in 5,250 Pudong projects worth US$25.8 billion.