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Overseas investors have shown great enthusiasm in the country's western region this year with a batch of projects worth millions of dollars being established.

Foreign direct investment (FDI) in western China is expected to reach US$3 billion by the end of this year, a 70 per cent increase compared to last year, said Du Ping, department director of the Office for Western Region Development of the State Council.

"Compared with previous years, this year we are expecting to achieve great success in attracting foreign investment," Du said at yesterday's press conference held before the two-day Western Forum of China 2004, which starts today in Nanning.

Du said 18 projects with a total investment of about US$2 billion from multinational companies, including chip maker Intel, will be put into operation by the end of this year in the nation's western areas, with most being in high value-added industries.

The projects will contribute to the upgrading of industry and improve the infrastructure situation in the region as they focused on information technology, clean energy, and environmental protection.

The official said the govern-ment will continue its national strategy to develop the western regions.

He said the ongoing macro-control measures, aiming at cooling down some over-heated industries, will not slow down the development of the western region.

However, Du said the western region's ability to attract foreign investment remains weak, as statistics from the National Development and Reforms Commission show FDI in the west accounts for only 3.2 per cent of the total national FDI, more than 2 percentages points down compared with the figure in 2000.

In the past few years, foreign investment was mainly concentrated in manufacturing industries, in which the coastal region enjoyed a geographical advantage because enterprises in this area spend less time and money transporting materials and products between factories and overseas markets.

"Therefore, despite some favourable policies in the western region, most overseas enterprises took the eastern region as their priority," he said.

The forum will attract over 300 domestic and overseas represen-tatives, including high-ranking government officials, foreign diplomatic envoys in China, heads of enterprises in the western region, overseas investors and economists.

Representatives will discuss four topics: agriculture in the region, new patterns of industrialization, service industries, and co-operation between eastern and western China.