Labor costs, infrastructure and market attracting firms to region

Cheap and qualified workers as well as a growing consumer market and maturing infrastructure are helping to turn China's central region into a popular destination for foreign and domestic investment, many companies have said.

Workers at a Dongfeng Motor Corp plant in Wuhan, capital of Hubei Province. [China Daily]

Earlier this month, Pfizer, the world's largest pharmaceutical company, announced that it will set up a research and development (R&D) center in Wuhan, capital of Hubei Province.

Pfizer did not disclose its exact investment, but the Wuhan center is considered to be the second of its kind that the company has set up in China after its Shanghai R&D center, which largely focuses on biopharmaceutical R&D and innovation initiatives to support global scientific studies.

The Wuhan center is also said to be the first such facility in China's central region set up by an international pharmaceutical firm.

"It will be a significant part of our global R&D operations, helping the nation to strengthen the biopharmaceutical industry in the region," said Mikael Dolsten, president of Pfizer Worldwide Research and Development.

Due to its lower labor costs, China's central region is drawing international enterprises like Pfizer that have been cutting costs to tide over the financial crisis, analysts said.

Hubei is one of the six provinces that make up the central hinterland. The other five provinces are Shanxi, Anhui, Jiangxi, Henan and Hunan.

The central region holds about a quarter of the nation's population, or 370 million people.

During the first eight months of the year, the funds flowing into China's central region grew by 19.5 percent from a year earlier to US$4.23 billion, accounting for 6.41 percent of China's total foreign direct investment (FDI) during the same period, according to figures from the Ministry of Commerce. The growth rate is two percentage points higher than that of the country's eastern area.

In April, the State Council also released a new foreign investment directive which pointed out that the nation's central and western regions will be given preferential policies in finance, taxation and land use as part of a strategy to adjust the nation's investment structure.