THE Yangtze Valley is being developed and opened up to the outside world to give the region an economic powerhouse that will lead China to rapid growth into the next century. The central government advanced the strategy in June last year while authorising five more cities along the Yangtze River - China's biggest inland waterway - open to the rest of the world. This will mean there are 10 open cities on the Yangtze. The strategy was outlined in greater detail in April this year when the government announced an investment plan worth 1,000 billion yuan (HK$1,355.55 billion) for construction of important projects in the river valley in the last eight years of this century. The central government plans to contribute 110 billion yuan, about one tenth of the cost. The rest is expected to come from regional and foreign investment. The Yangtze River, China's biggest river and ranked third in the world, is the economic development linchpin of the country. The region - which starts from the Pudong development area of Shanghai in the east and ends in Chongqing city in Sichuan Province in the west - involves the provinces of Jiangsu, Zhejiang, Anhui, Jiangxi, Hunan, Hubei, Sichuan and Shanghai municipality. It covers an area of 330,000 square kilometres with 168 million inhabitants and produces about one fifth of China's gross national product (GNP). Shanghai will be turned into an international economic, financial and trade centre. The pillar industries of automobiles, iron and steel, electronics and petrochemicals will be developed in the municipality. Important projects include three of the country's four largest trans-century projects, the Beijing-Shanghai express railway linking China's two biggest cities, the diversion of water from Danjiangkou Reservoir on the largest tributary of the Yangtze to the dry north China plain, and the Three Gorges project, which involves an investment of 120 billion yuan and a construction period of 15 years. The construction of east-west expressways and the linking of the railways between Shanghai and Chengdu in Sichuan Province, will make the provinces more accessible to China's largest economic centre and coastal ports and the Three Gorges project. Several big power schemes, including the second phase of the Qinshan nuclear power station, will begin operation in the next few years. China hopes to attract US$10 billion (HK$77.4 billion) to 28 cities and eight prefectures, which offer preferential treatment to foreign investors. China will adopt the common international practice known as ''BOT'' - build, operation and transfer - in the construction of energy, communications and other infrastructure facilities. Under BOT, foreign investors will build important projects, then operate them to recover investment and make profit while China collects taxes. The Ministry of Foreign Trade and Economic Co-operation is organising 15 Chinese international companies into a joint group - the Shanghai Zhouji (Inter-continental) Development Co Ltd - for developing the Pudong new area. Shanghai has spent 15 billion yuan on building the first batch of infrastructural facilities and plans to invest more than 30 billion yuan in the second stage, including an international airport, a tunnel under the Huangpu river and a subway. About 200 international trading companies are represented in the Waigaoqiao Free Trade Zone. With the improvements, the region has become an attraction for foreign investment. Last year, it concluded contracts for US$18 billion in foreign funds - a quarter of the national total.