China's western provinces are becoming the focus of multinational firms' global strategies, bringing with them investment in business and infrastructure.

Business people at the sixth China Western Region International Economic Cooperation Fair in Xi'an, Shaanxi Province, have been hearing of the benefits to be gained from the competitive land and labor costs in western China.

Since the launching of the government's western development strategy in 2000, it has only registered about three percent of the nation's actual foreign investment, most of which is channeled to eastern regions.

Professor Bai Wenxiu, of the Xi'an-based Northwest University economics department, said, "Infrastructure like transport in the west is still quite under-developed. For example, a shipment from Xi'an to Shanghai costs the same in time and money as transport from Shanghai to the United States."

The National Development Bank has earmarked 3 billion yuan (387 million U.S. dollars) in loans for the infrastructure, including the construction of economic development zones in the cities of Xi'an, Xining and Chengdu.

Meanwhile, Germany's Fraport, the operator of Frankfurt Airport, has paid 490 million yuan to obtain a 24.5-percent stake in the Xianyang International Airport, in Shaanxi, offering opportunities to upgrade and expand the facility.

Yan Xuan, vice president of Oracle's Beijing company, said Oracle would set up a design branch in Xi'an -- its fifth China branch -- in the first half of this year, hoping to find opportunities in the development of western China.

Yan said the company would probably employ hundreds of people, but the exact number was not yet known.

"Xi'an, home to the world famous terracotta warriors, is not only a tourist stop, but also a portal to business opportunities in the west," he added.

Other west-looking multinationals include Idaho-based Micron Technology, a major semiconductor firm, which established a manufacturing facility in Xi'an in March. Two days later, Applied Materials Inc., a major U.S. nanotechnology manufacturer, also opened a new technology support center in the city.

Western regions were becoming increasingly competitive over the east where land and labor costs had soared in recent years, said Shi Ying, deputy director of the Shaanxi Academy of Social Sciences.

Yasuo Noshiro, president of Fujitsu (Xi'an) System Engineering Co., Ltd, said its profits have increased several-fold in the five years since it set up in the city.

Japan's Cosmo Oil Co. Ltd. was also entering the western market, supplying energy saving and clean coal technologies to Shaanxi-based mines, chairman Keiichiro Okabe said.