INVESTMENT INCENTIVES FOR CENTRAL CHINA
Thus far, there are no regionally specific investment incentives available to foreign investors in Central China that are not already generally available on a national basis. Although it may be possible to negotiate preferential treatments for larger investments, Central China as yet does not offer any specific tax breaks for investors to assist with the absorption of the higher costs of transportation in the region. The authorities are however considering what additional incentives might be offered in the future.
BASIC ANALYSIS
Obviously there is a lot of difference between types of international investor, and this piece is non-specific. For retail operations such as Wal-Mart and so on, the region, with its massive population, is going to be (and already is) a fertile playing ground. International commodities manufacturers such as Mittal Steel, ensuring its dominance over global steel supply, have made a strategic investment in the region of one of China's largest steel manufacturers. In time, businesses supplying such industries may begin to enter the central China market. Yet for export-based businesses, central China, with its burden of increased transportation costs, still seems like a bridge too far until competition, a breaking of existing monopolies, and an increase in transportation infrastructure can start to bring those costs down. This would appear to be a longer goal target. Of the cities and regions to note, two strike us as being worth further investigation :
Hefei (Anhui Province), and its proximity to the regional powerhouse of Shanghai may be worth looking into as a manufacturing area if those logistics costs can be brought under control, and Wuhan, with its river infrastructure. But for now, with no discernable benefits available for investing in the region, China's desire to move investors out of the coastal cities and inland will have to wait a little while longer and move beyond a pure marketing campaign into something more financially viable.
