Shanxi, one of the largest coal production bases located in North China, saw slower economic growth on downturn in traditional industries like coal, steel, and heavy machine. Nevertheless, the continuous anti-corruption campaign has improved the soft environment for investment in Shanxi, attracting increasing foreign investment in non-coal industries such as manufacturing industry, power industry and modern service industry that feature industrial transformation.
-- Improved foreign investment quality seen in 2015
In 2015, Shanxi Province hailed more quality foreign investment despite less new foreign investors. According to statistics from the Department of Commerce of Shanxi province, there are 36 foreign enterprises approved to make direct investment in Shanxi, declining 28 percent from a year ago.
Contracted foreign investment increased 1.47 percent on year to 982 million US dollars, but the actual use of foreign investment decreased 2.78 percent on year to 2.37 billion yuan. Foreign investment appeared unbalanced in the 11 prefecture cities of Shanxi.
The majority of foreign investment was injected into secondary industry and large projects, but few to small projects, according to an analysis by the Department of Commerce of Shanxi Province Projects with foreign capital are leaning forward to conforming to the development plan for strategic emerging industries of Shanxi, which is favorable for overall transformation of industrial economy and is expected to create more opportunities for high-end investment.
-- Better soft environment for foreign investment
The continuous anti-corruption movement has improved the soft environment for foreign investment. Meanwhile, the improved legal system for investment environment in Shanxi has lowered risks that foreign investors might encounter. Besides, Shanxi Province has adjusted its development strategy by vigorously boosting non-coal business and offering multi favorable policies for non-coal investment.
Rich resources in tourism, agriculture, and minerals, mature manufacturing system and infrastructure in Shanxi as well as its location advantage of neighboring to Bohai-Rim and Beijing-Tianjin-Hebei economic circle facilitate Shanxi with good environment for foreign investment.
-- Suggestion for foreign investment
Insiders suggest not investing in coal, coking, metallurgy, steel, and power industries that are facing overcapacity, not only due to inadequate demand worldwide but also because some of them are target industries to realize de-capacity and transformation in China. However, investment opportunities in non-coal emerging industries are increasing.
Shanxi Province has redirected to focus on developing culture and tourism, equipment manufacturing, new energy, new material, energy saving and environmental protection, food and medicine, and modern service industries. Accordingly, Shanxi Province would provide supporting policies for related enterprises.
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