Business people from Taiwan province are starting to shift the focus of their investment in the Chinese mainland to the northeastern regions.

Along with the implementation of China's strategy to rejuvenate the northeastern old industrial bases, the regions possess comparative advantages in energy supply and human resources, local economists believe.

For example, Shenyang, capital of Liaoning Province, had approved the establishment of 800-plus enterprises by the end of 2005 thanks to investment from Taiwan. The city attracted nearly 1.2 billion U.S. dollars in contractual use of capital from Taiwan, and actually used more than 600 million U.S. dollars.

Last year, Taiwan industrial parks, set up for the specific purpose of absorbing investment from Taiwan, were planned in Liaoning and Jilin provinces.

Construction on the park in Liaoning started in November 2005 at Tiexi District in the provincial capital, consuming a total area of two square kilometers. The first phase of the project will need an investment of 3.5 billion yuan (431.6 million U.S. dollars).

Meanwhile, a 10 square km Taiwan industrial park will be built in Changchun, the provincial capital of Jilin, involving a total investment of three billion yuan (369.9 million U.S. dollars).

Heilongjiang Province, also in northeast China, has opted to channel more investment from Taiwan into agricultural production.

Last year, a cross-Straits pilot agricultural zone and a farm start-up park catering for Taiwanese investors were launched in Heilongjiang to encourage exchange in agricultural production and assist farmers from Taiwan to establish business on the mainland.

Taiwan business people, who attended the recent 4th Liaoning Taiwan Week, a regular business promotion campaign, said that the booming Yangtze River and Pearl River deltas are becoming too packed to accommodate more outside investment. However, they believed northeastern China was still a virgin land, ripe for development.

Investors from Taiwan highlighted the great importance of infrastructure in northeastern China.

A senior official with the Taiwan-based AMTC company said, "Water and power supply, as well as communications, are the most important considerations for an investor when he has to decide whether or not to pump money into an area."

He hoped that the northeastern regions were able to ensure a stable energy supply and provide favorable supporting infrastructure.

The need for continuity and stability in the mainland's opening-up policy is also at the forefront of the investors' minds.

Some of them have an eye on the reform of large state-owned enterprises in the region, while others are paying attention to the feasibility of building hospitals there with investment from Taiwan.

Xue Jikun, attached to the economics school of Jilin University, said,"Intensive grain processing will gradually become a new pillar of the local economy in northeastern China.

"Taiwan boasts advanced technology and equipment in intensive grain processing, while northeastern China is blessed with a huge amount of raw materials and a burgeoning labor force. Cooperation across the Straits in this field will be promising."

Source: Xinhua