A Hong Kong-based energy firm has located its regional headquarters in the ancient Chinese capital of Xi'an, one of the latest overseas companies to seek opportunities in western China amid the global financial crisis.
Eco Service Management Company Ltd., a wholly-owned subsidiary of the Hong Kong and China Gas Company Limited (Towngas), set up its regional headquarters at a high-tech zone on the outskirts of Xi'an last week, said Song Haiyang, spokesman of the high-tech zone.
"It was the first overseas company to locate regional headquarters in Xi'an," Song said Monday.
Alfred Chan, managing director of Towngas, said he and his colleagues were impressed with the infrastructure in Xi'an and services offered at the high-tech zone.
Chan said Eco Service would handle all the business of its parent company, the Hong Kong-registered Eco Environmental Protection Investment Company, in China's interior regions, including the exploitation and use of coal bed methane and natural gas, coal-based energy and chemical engineering.
Prior to the establishment of the Xi'an branch, Eco Service had reached energy investment agreements with partners in Shaanxi, Guangdong and Jiangsu provinces as well as Inner Mongolia Autonomous Region, with a combined value of 15 billion yuan (2.15 billion U.S. dollars), said Chan.
The company plans to invest another 15 billion yuan in the interior regions in the coming five years, he said.
While the global financial crisis has shut down many foreign-funded businesses along China's southern and eastern coasts since last year, a growing number of investors are moving westward to seek opportunities.
Last month, ABB, a leading power and automation technology group, announced the opening of a new engineering center in southwest China's Chongqing municipality.
Tobias Becker, head of the Process Automation Division for ABB North Asia Region and ABB China, said the center would "consolidate the strategic importance of Chongqing" in the company's overall business deployment.
"China has more leeway for investors in time of the financial crisis, given its huge market demand and vast expanse of territory," said leading economist Hu Angang. "When the east gets dark, the west offers some light."
China's decade-long policy to foster development in its western regions was beginning to pay off, said Prof. Yin Xingmin with the Shanghai-based Fudan University. "Expansion of fixed asset investment has improved infrastructure and narrowed the gap between China's east and west."
As a result, several western provinces and regions were expecting to outpace the national economic growth this year, he said. "The northwestern Shaanxi Province, for example, is aiming at a 13-percent growth rate this year, compared with the 8-percentprojected national GDP growth."
Shaanxi vice governor Zhao Yongzheng said the confidence was fueled by the growing number of investment projects, including 42 energy projects with a combined value of 42.8 billion yuan a year, 27 equipment manufacturing projects valued at 7.4 billion yuan a year, 10 high-tech projects of 1.3 billion yuan and 37 infrastructure construction projects with 40.8 billion yuan of annual investment.
Some observers, however, warn that western China should not be too optimistic. "The western regions generally lack the economic capacity and competitiveness to tackle the financial crisis," said Du Ying, deputy head of the National Development and Reform Commission (NDRC). "They will need more efforts and longer time to shake off the impact."
Compared with wealthier eastern provinces, the fledgling, singular and very often resource-based economies of western regions were more fragile in the global downturn, said Shi Ying, deputy head of the Shaanxi Provincial Academy of Social Sciences. "Some businesses are already feeling the chill."
He cited the Fast Group, the province's leading auto equipment producer and exporter, which reported an 80-percent drop in orders in the first quarter.
Lack of orders and falling prices on the international market had caused many resource-based companies in western China to cut production, or even close down, he said.
"Nearly all the western provinces and regions need to transform from resource-based and singular economies to more sustainable and diversified patterns," said Shi.
While Shaanxi was fostering high-tech industries, its western neighbors Gansu and Xinjiang were exploiting wind power hoping to parallel the Yangtze's Three Gorges Dam in terms of power generating capacities, he said.
"The impact of the financial crisis on western China is sometimes indirect and gradual," said NDRC's deputy head Du Ying. "The western regions need to overhaul their industries and expand cooperation with the eastern provinces to solve their common problems."
Mazda Motor Corp said on Wednesday its sales in China in the January-March quarter rose 22 percent to a record 37,217 vehicles, and forecast a 33 percent jump for all of 2009 to 170,000 vehicles.
For March, sales grew 18 percent to 14,239 thanks to brisk sales of the Mazda6 sedan, the Japanese automaker said. That outpaced a 10.3 percent rise in the overall Chinese market, which had been bolstered by government incentives to lift demand.
Mazda is due to launch a remodeled version of the Mazda6 on April 25 in China, but will continue to sell the existing version due to its popularity, a spokeswoman said.
Mazda operates a three-way car manufacturing venture in China with its top shareholder Ford Motor Co and Changan Automobile Co, and has a separate venture with FAW Car.
Chinese officials told a press conference that the upcoming fair is aimed to further aid trade between China and South Asian countries, help China import more from South Asia and reduce the trade imbalance between China and South Asian countries.
Chen Jian, vice minister of the Ministry of Commerce, said trade between China and South Asia had developed vigorously in the last few years, with two-way trade volume jumping to 66 billion U.S. dollars last year from 5.7 billion U.S. dollars in 2000.
Chen said both Chinese and South Asian economies were hit by the global financial crisis, which featured plunging exports, deceleration of economic growth and factory closure, and the commodity fair would help China to import more from South Asian nations and provide an opportunity for these countries to discuss how to expand trade and fight the financial crisis.
According to Chen, the Chinese government was taking a series of measures to improve trade with South Asian countries, including cutting tariffs, aiding import and export, and encouraging imports from South Asian countries.
Gu Chaoxi, vice governor of Yunnan, announced that the second commodity fair, like the first which was held in Beijing in December 2007, would also exempt booth and exhibition fees for all South Asian exhibitors. The Chinese organizer would also cover the transportation cost of exhibits once they were within the Chinese boundary.
Gu also promised to offer other free services for exhibitors from South Asia, such as publicity, marketing and quick customs declaration.
Gu also said three major events would be held on the sidelines of the upcoming commodity fair, namely, a high-level official meeting between China and South Asian Association for Regional Cooperation, policy briefings for investment in South Asia and trade cooperation meeting.
Gu said the upcoming commodity fair was planned to have more than 350 booths for exhibitors from seven South Asian countries, including India, Pakistan, Afghanistan, Bangladesh, Sri Lanka and Nepal.
According to Gu, the commodity fair would be held alongside the 17th China Kunming Import & Export Commodities Fair, an annual regional trade exhibition sponsored by Yunnan and its neighboring regions including Sichuan and Tibet.
Industrial and Commercial Bank of China (ICBC), the world's biggest bank by market value, and 90 other companies from the Chinese mainland, figure in this year's list of the world's 2,000 biggest companies compiled by Forbes magazine, up from last year's 88 firms.
ICBC has been ranked 12th, the highest for a Chinese company, in the Forbes Global 2000 list, which uses equal weighting of sales, profits, assets and market value to rank companies according to size.
The country's largest oil producer China National Petroleum Corp is ranked 14th on the list, while another banking giant China Construction Bank is 23rd.
In addition, 42 companies from Hong Kong and 45 from Taiwan have also made it into the list.
Although US conglomerate General Electric tops the list, the number of US companies on the list has dwindled from last year's 711 to 551 this year, as many companies were severely battered by the global financial crisis.
The US, whose companies are still dominant on the list, had 751 companies when the list was first published in 2004.
The Forbes Global 2000 companies account for $32 trillion in revenues, $1.6 trillion in profits, $125 trillion in assets and $20 trillion in market value, the US magazine said.
But the aggregate profits and market value took the steepest hit in the latest version of the Global 2000.
Net income of the Global 2000 companies fell to $1.63 trillion, a decline of 30.9 percent from the $2.36 trillion in 2008 and market value dropped 49.3 percent to $19.6 trillion at the same time.
The rankings this year span 62 countries and regions, with more coming from developing countries like India, which has 47 entries.
Even Kazakhstan is now a Global 2000 member. Also gaining a significant presence on the list are corporations from Arab countries: Kuwait, Saudi Arabia and the United Arab Emirates each have at least 10 entries in this year's list.
The Forbes Global 2000 list is a rival to the more established Fortune 500 list, which is based only on revenues.
Led by China's largest refiner China Petrochemical Corp, which is ranked 16th, nearly 35 Chinese firms figure in the Fortune 500 list.
The oil refiner stands 33rd in this year's Forbes 2000 list, climbing up from last year's 94th.
Despite the turmoil in the banking industry, banks still dominate the list, with 307 entries, thanks in large measure to their asset totals. A total of 11 banks from the Chinese mainland are on the list.
Chinese shares rose 2.7 percent Friday, driven by world stock market gains and expectations of economic recovery in the first quarter, analysts said.
China's exports dropped 17.1 percent in March from a year earlier to $90.29 billion, according to figures from the General Administration of Customs Friday. The decline slowed from the 25.7 percent year-on-year fall in February.
Imports grew by 14 percent month-on-month in March, pointing to improved foreign trade, according to Customs.
The benchmark Shanghai Composite Index rose 2.7 percent, or 64.35 points to close at 2,444.23. The Shenzhen Component Index was up 3.49 percent, or 315.13 points to close at 9345.44.
Gains outnumbered losses by 899 to 18 in Shanghai and 763 to 20 in Shenzhen.
Combined turnover rose to 239.98 billion yuan ($35.14 billion) from 166.94 billion yuan the previous trading day.
The M2 figure -- a broad measure of money supply, which covers cash in circulation and all deposits -- was expected to rise 25 percent in March, which "suggested abundant liquidity," Guosen Securities analyst Lin Songli said.
"This is a big increase as the consumer price index for the same time is expected to fall and the gross domestic product in the first quarter may increase by only 6 percent," he said.
The banking sector led the gains Friday after China Merchant Bank (CMB) posted profit gains in 2008 Thursday in its unaudited annual report. Net profit rose from 15.24 billion yuan in 2007 to 21.08 billion yuan in 2008.
Share prices for the CMB rose 1.64 percent to close at 16.14 yuan, and those of the Industrial and Commercial Bank of China, the largest lender by market value, rose 1.75 percent to 4.07 yuan and the Bank of Communications up 4.41 percent to 6.87 yuan.
The real estate sector rose as home sales in major cities have been increasing. "Share prices for real estate developers were supported by rising home sales," Lin said.
Gemdale Corp rose 3.97 percent to close at 11.25 yuan, and Poly Real Estate Group was up 3.27 percent to 22.75 yuan.
Reports on Friday that the government would allocate 9.3 percent of the 4-trillion-yuan stimulus package to support the energy sector drove up share prices of PetroChina by 1.68 percent to 11.48 yuan, and China Shenhua Energy, the biggest coal producer, by 4.59 percent to 22.81 yuan.
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