The "west delta", the unofficial name for a planned economic zone in relatively less developed western China, is becoming a magnet for overseas investment thanks to policy incentives, low costs, a large, educated workforce and low competition.

The "west delta" comprises Chongqing Municipality, Sichuan Province and Shaanxi Province, and the term, first coined by Huang Qifan, mayor of Chongqing, in 2009, has yet to be officially recognized by the central government. Nonetheless, provincial governments have been strengthening cooperation in policy consolidation,resource sharing and personnel training.

Entrepreneur Martin J. Stroka, 26, from Chicago, set up SkyNet Media & Consulting, with ten employees, in 2009 in Xi'an, capital of Shaanxi Province.

"I started my business here because the area has low living and operation costs, but high quality employees, since as far as I know, Xi'an's college education is among the best in China," Stroka told Xinhua while attending the 14th Investment and Trade Forum for Cooperation Between East and West China, which was held in Xi'an from April 8 to 12.

More importantly, the competition in western China is less fierce than in eastern China or other developed areas in the world, where many established companies had already gained a secure foothold, he said.

James Wu, also present at the forum, is deputy director of the Chinese Mainland and Taiwan Companies Exchange Association, which aims to assist companies across the Taiwan Strait in exchanges and cooperation.

Wu told Xinhua more outside investment is being lured into western China thanks to tax incentives provided in the "go west" drive launched in 2000 and the bountiful workforce, which is a big draw given the labor shortages in China's coastal areas.

"It is becoming a trend for outside investment to cluster in China's west instead of the traditional magnet of east China. More and more Taiwan companies are investing in the west mainly because of tax breaks," Wu said.

Chongqing alone saw an influx of US$4.016 billion in 2009, up from US$2.7 billion in 2008, the fastest growth in China.

Provincial government statistics show more than 4,000 foreign companies invested in Shaanxi, with total foreign direct investment in 2009 of US$1.511 billion. Sichuan saw US$3.253 billion of foreign investment from January to November 2009.

The delta's foreign investment accounted for 9 percent of the national total of 90 billion in 2009, according to the Ministry of Commerce.

Stroka also plans to locate his new venture in the delta. His company is developing a new website, iChina.com, to make it "the ultimate destination for expats, travelers and Chinese, which will cover information sharing, social networking and e-commerce."

The team, based in Xi'an, started building the website at the end of 2009 and they expect to have it up and running by the fall 2010, Stroka said.

But not all foreign companies find it convenient to invest in the delta.

Stephen Sham, Mayor of Alhambra, California, who was also present at the forum, said some industries were not "the priority areas" for the local government, which had discouraged some foreign firms.

"I once introduced an American textile company to the Shaanxi provincial government, but the province's textile industry was not very well-developed since it had not been a top priority for the provincial government, and the American company later invested in Nanchang, capital city of east China's Jiangxi Province," Sham said.

The delta, included in the "go west" drive, spans 380,000 square km and has a population of 130 million. The area's GDP was 1.9 trillion yuan (US$278 billion) in 2008, about seven percent of China's total.

The "go west" drive, initiated in 2000 to boost the less developed western regions, covers six provinces, five autonomous regions and Chongqing municipality, accounting for more than 70 percent of the mainland's area.

China's western development strategy involves infrastructure building, attracting of foreign investment, and increased efforts in ecological protection, education, and talent retention.

(Xinhua News Agency April 14, 2010)