Donghu New Technology Development Zone in central China's Hubei Province will be developed into a national innovation demonstration zone, local officials announced Wednesday.

The goal is to trial policies aimed at preventing talent loss in state-owned enterprises and financing difficulties, said Wang Jianqun, vice president of the zone's Strategic Research Institute.

The State Council approved Donghu Development Zone in Wuhan, capital of Hubei, last month as the second national innovation demonstration zone after Zhongguancun Science Park in Beijing, said Wang.

Donghu Development Zone, covering 80 square kilometers, has attracted US$748 million of foreign investment and 15.63 billion yuan (US$2.29 billion) of domestic investment since it opened in 1988.

Despite the budding success of many companies in Donghu Development Zone, others were crippled by a lack of funding, said Qin Zunwen, of Hubei Provincial Academy of Social Sciences.

"We will try to get the approval of the China Securities Regulatory Commission to set up a system in which unlisted companies can transfer shares," said Wang Jianqun.

"We will also encourage commercial banks to open branches in Wuhan," Wang said.

(Xinhua News Agency January 6, 2010)