Multinational companies are also now starting to view the region as the next step towards an integrated China strategy, and the consumer population in the second- and third-tier cities on Central China represents a growing, largely untapped domestic market for foreign products and services.

Ideally, Beijing would prefer to see the more northern provinces of Central China become an industrial manufacturing center, as there is more likely to be less environmental impact, and allowing for the more fertile lands in the southern areas to be farmed. However, logistics and infrastructure will not always make this a financially beneficial move for target businesses.

Where air pollution is a big problem for the east coast, Central China?s environmental concerns surround water in both the Yangtze and the Yellow River. For the Yellow River, the problem relates to drastic and increasing shortages in water and rising salinity, whereas along the Yangtze, there are numerous concerns over the environmental impact of the Three Gorges project, particularly on the downstream effects of the dam.

Anhui

Anhui, a province that traditionally has focused on agriculture, is attracting big international investors as the costs of land and labor rise in China?s coastal regions. In 2007 alone, 499 new foreign enterprises established presences in the province.

Anhui?s main draw, low wages and cheap land, will continue to provide incentives for FDI in the years to come. The provincial capital Hefei, a six-hour bus ride from Shanghai, accounts for about 30 percent of the total investment in the province.

Anhui is also profiting from processing trade restrictions that are forcing manufacturers in Guangdong and the Yangtze River Delta region to move operations inland. One of the biggest selling points: electricity. Zhejiang and Jiangsu provinces have experienced shortages that Anhui, with a power capacity of 15.8 million kW, has not. Four more power projects were approved last year and will increase capacity to 30 million kW when operational in 2010.
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