Overseas investors signed contracts in Hong Kong yesterday to invest $560 million in 15 projects in two districts of Guangzhou.

The companies include information firm AC Nielsen, luxury clothing maker VASTO, computer maker Hewlett Packard and exhibition organizer Messe Frankfurt.

The districts are the Guangzhou Development District and the Luogang District, where the companies will invest in outsourcing, logistics, exhibition and animation.

Xue Xiaofeng, Party chief of the two districts, said overseas investors are now showing greater interest in Guangzhou's service sectors instead of just manufacturing and exports.

"Under the backdrop of globalization and industrial relocation, Guangzhou will have to grasp new opportunities and hone its competitive edge in the service industry," he said.

Home to numerous manufacturers and exporters, Guangzhou is now under an arduous but critical transition from an industrial city to a service-orientated one, he told Hong Kong investors at a business seminar.

Heading a government delegation, Xue wants to attract as many local investors as possible during his four-day visit to Hong Kong.

In particular, he hopes the Guangzhou Development District will become a lure to local investors with its sound facilities.

"Among all overseas investors in the district, Hong Kong businesses account for half. ... And we welcome more friends from Hong Kong," Xue said.

The district is supposed to accommodate mainland operations of multinational corporations, especially those service firms.

It boasts four zones, designed for companies in various sectors including financial, creative, outsourcing and logistics.

Preferential policies such as tax rebates and simply administrative procedures are given.

"The Guangzhou Development District can cater to the needs of Hong Kong service firms that want to relocate part of their operations to nearby cities, save money and enter into the vast mainland market," Xue said.

The Guangzhou Development District used to be under the administration of the Luogang District, but it was upgraded to be under the direct administration of the Guangzhou municipal government.

(HK Edition 04/22/2008 page2)