The imbalance of foreign investment in eastern, western and central China is growing and the government needs to make changes to the investment environment, said Ma Yu, a researcher with the Ministry of Commerce, at a conference on trans-national companies and revitalizing northeast China.

A survey conducted by the Ministry of Commerce shows that China had utilized US$612.51 billion of foreign direct investment (FDI) as of the end of 2005. The 10 eastern provinces have absorbed 81.2 percent; the 6 middle provinces have seen 7.6 percent; the 12 western provinces have used 4.5 percent; and the three northeastern provinces have received 6.7 percent.

Ma Yu said the most effective way to reverse the Matthew Effect is innovation. The eastern provinces have been heavily invested in because of innovation in the investment system, and this innovation has translated into productivity.

By People's Daily Online