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Economic co-operation between South China's Guangdong Province and Central China's Hunan Province was stepped up yesterday (April 19th) as some 98 contracts were signed involving a total investment of 35.83 billion yuan (US$4.3 billion).

Guangdong's investment in Hunan is 24.1 billion yuan (US$2.9 billion), and the remaining 11.73 billion yuan (US$1.4 billion) consists of Guangdong's capital inflow by its business partners in Hunan. The sectors involved in the deals include infrastructure, transportation and circulation, retail, agriculture and real estate.

Among the 200 Guangdong enterprises taking part in the projects, two-thirds are private.

A.Best, a Shenzhen-based retailer, also a private enterprise, is planning to launch a new outlet in the capital city Changsha which will be the 11th supermarket in Hunan, said Li Yuncong, a manager with A.Best.

'The high-density population and huge consumption potential in Changsha is a big attraction to us,' Li said in an interview with China Daily.

The deals were finalized by a 400-member Guangdong delegation -, mainly representatives from State-owned, joint ventures and private businesses - which has been negotiating and signing contracts in Hunan in the last two months.

In February, business leaders from Guangdong set out on a weeklong trip to Hunan, with some 600-company delegates interested in expanding business to neighboring Hunan Province.

'Guangdong now tops other domestic provinces in investing in Hunan in terms of project variety and the total value,' said Wu Kaili, head of the delegation.

Statistics show that a total 2,673 projects in Hunan, worth 22.67 billion yuan (US$2.7 billion) were invested in by Guangdong businesses in the 1999-2003 period, which accounts for a more than one-third share of total domestic investment to the province.

In 2003 alone, the capital inflow from Guangdong to Hunan was 12.57 billion yuan (US$1.5 billion), on 998 projects.

'The pace of business expansion for Guangdong enterprises has been accelerated since last year when the concept of the Pan-Pearl River Delta economic circle was planned,' said Wu, indicating that the contractual value clinched yesterday, surpassing the total in the past five years, is 22.67 billion yuan (US$2.7 billion).

The Pan-Pearl River Delta (PPRD) economic circle, known as South China's economic hub, covers nine provinces and the Hong Kong and Macao Special Administration Regions.

The provinces belonging to the group are sparing no effort in grabbing more market share and are especially emphasizing more co-operations with the Pearl River Delta Regions and Hong Kong and Macao.

They regard the PPRD as a new opportunity and starting point to gain even faster economic development.

Yu Youjun, deputy governor of Hunan and the former mayor of Shenzhen, a booming city in Guangdong, says both Guandong and Hunan are making great efforts to boost business ties.

He said Hunan's economic development is now at the level Guangdong was 10 years ago, and that is why upgrading local industry with the help of its neighbor is urgent.

Guangdong is looking to increase ties with provinces with abundant natural resources, capable transportation networks and low costs.

Some five million Hunan laborers are now working in Guangdong, making up about one-third of the province's migrant workers.

Editor: Catherine