Central & Western China 2006

by Chris Devonshire-Ellis, Senior Partner, Dezan Shira & Associates

Investment slows, Chongqing infrastructure is still problematic, although the South-West improves connections to South-East Asia. Opportunities for the adventurous but tempered with poor governance and transparency. China's Western borders however offer great potential to those familiar with Central Asia.

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.

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This article included in China Briefing Magazine
January / February 2006: China National Overview 2006