China will select 50 cities in its middle and western inland to help them, with favorable tax and industrial policies, attract processing trade relocated from the coastal east, a senior official of the Chinese Commerce Ministry said here Tuesday.

"We have already decided on 9 cities in the middle or west earlier this year and there are other cities working on their application," said Wang Qinhua, director of industry with the ministry, at a conference to inform business people with mainland policy changes.

With the coastal east undergoing industrial upgrading after nearly 30 years of remarkable growth, China has recently expanded its catalogue of processed goods subject to export limits, which officials had said is aimed at restricting industries involving high pollution or energy consumption.

Ma Xiuhong, vice minister of commerce, said China, now embarking on a new phase of growth, needs to optimize its approach to and profile of foreign investments in the country.

Incentives would be used for foreign investments to be put in high-tech industries, advanced manufacturing, environmental industries and research and development, in the country´s comparatively underdeveloped middle and west rather than the developed east, she said.

The State Development Bank has recently announced that it is setting aside 30 billion yuan (4 billion U.S. dollars) for preferential loaning to businesses investing in the middle and west.

Hong Kong, which is currently the mainland´s largest foreign investment source and trade partner, has played an important role in facilitating the country´s development, but entrepreneurs from the southern special administrative region could be the hardest hit by the policy adjustment.

Business people from Hong Kong are realizing that it is inevitable and necessary for themselves to adjust to state policy changes, said Frederick Lam, chief executive of the Hong Kong Trade Development Council, a government-affiliated organization.

A businesswoman, who was unwilling to be identified, said at the conference that she is considering moving her chemical plants from the southeastern province of Guangdong to the inland area but has not made up her mind on which place to move to, given the numerous choices.

Traffic and "soft" infrastructural facilities are what she cares the most, she added.

Wang said that the Commerce Ministry is working with other government organizations for further incentives to help the middle and west inland attract investment. Certain proposals by the treasury and planning authorities are under consideration, she added.

Source:Xinhua