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.
