The much trumpeted ?Go West? campaign seems to have fizzled out rather, possibly in favor of the North-East as many of China?s top Commercial Leaders, including Bo Xi Lai (Minister of Commerce), are from the region and are putting it?s redevelopment first. That is something of a blow for China?s hinterland and the far west, but there are still good reasons for optimism. Firstly, local governments are able to offer some very attractive investment incentives, way over and beyond those available elsewhere ? even up to 8 or 10 years in profits tax free incentives. Secondly ? there is that gigantic population, if you can find the right products or services to exploit this. The downside is that infrastructure is lagging behind, and it?s a long way from the coast. That means obtaining China sales and RMB revenues are the key driver to success in these areas. The services industry may have significant opportunities ? advertising, promotions and similar disciplines to assist with the promotion of brands to this massive population. We?re still a little wary over the prospects for Chongqing ? the city posts a huge loss every year and we see corruption, infrastructure problems and the lack of free market enterprise being significant hurdles to overcome here. Further South and West however, the cities of Chengdu and Kunming are becoming increasingly bound together and with the new rail link to South East Asia being able to run goods all the way down to Singapore, the South West presents interesting possibilities, still low overall costs and excellent climate and living. Xinjiang will remain enigmatic ? agricultural based businesses predominating. However, that can be from crop production to the sales of hardware ? with China the worlds number one agricultural nation, opportunities are certainly there for equipment providers willing and able to do business with State Owned Enterprises and Regional Governments. You?ll be expected to provide excellent credit terms, but you are likely to get paid ? in time. Patience here is key, as is a good understanding of the region.

This huge area encompasses 2/3 of China?s total land mass. However, it is characterized by poor infrastructure, relatively low GDP and government interference. Nonetheless, for the investor used to dealing with developing markets there are without doubt many plum opportunities available, especially in the main Provincial capitals and second tier cities. Dezan Shira & Associates does not at this stage have a specific Western regional office ? very few consulting firms do. However, the firm has a long history of servicing clients throughout the region, and does so from a pertinent Dezan Shira office elsewhere. In fact the firm has advised on investments into the West totaling several hundred million dollars including Ningxia?s largest ever investment as well as many investments into Xinjiang and Yunnan (mainly agricultural) and Shanxi and Shaanxi Provinces (mining). The main contact for Western Regional Investments is our Senior Partner, Chris Devonshire-Ellis who has traveled extensively within the region and knows many of the Provincial Governors and City Mayors.
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