March 14, 2008 -- China's central government has approved China's first international and regional economic cooperation zone in Guangxi in late February. The construction of the Beibu Gulf Economic Zone began in 2006. With the approval, the Beibu Gulf Economic Zone will be formally incorporated into national development strategies.

The Beibu Gulf Economic Zone covers six coastal cities along the Beibu Gulf. It integrates the cities of Nanning, the region's capital, Beihai, Qinzhou, Fangchenggang, Chongzuo and Yulin.

"The state will adopt policies and measures to support mechanism innovation, rational industry layout and infrastructure construction in the Beibu Gulf Economic Zone," Qinglin Jia, China's top political advisor said in a statement.

Guangxi municipality has pledged a 100 billion yuan (US$ 14 billion) investment over the next five years for building and repairing 2,500 km railways to form a network hub in the area.

Officials say that the Beibu Gulf Zone will serve as the logistics base, business base, processing and manufacturing base and information exchange center for China-ASEAN cooperation.

"Beibu Gulf Zone promises broad prospects for further development and its growth potential is rapidly released," Xuequan Huang, director of Guangxi Personnel Bureau told Emerging China. "But the shortage of talent and professionals in petrochemicals, iron and steel, electricity, finance, tourism, port planning, logistics and marine industries is our bottleneck."

According to Huang, the regional government is also working on speeding up key cooperation projects including transportation, the marine industry, agriculture, forestry, fisheries, energy development, cross-border tourism, and environmental protection.

On February 29, Guangxi conducted a Beibu Gulf Zone Presentation conference in Beijing. The next day, a group of Japanese business delegates including Fortune 500 company Mitsui's CEO flew to Beihai to further investigate the area.

Chinese economic experts are optimistic about the future of Beibu Zone.

"Beibu Gulf Zone may turn out to be a new economic lead in driving China's coastal economy because Guangxi boasts so many advantages," Zhenghui Peng, professor of Pekin University said in a statement. "For one thing, as the only land and sea link between China and ASEAN, Beibu Zone will benefit from the rapid economic development of both and the heating-up of China-ASEAN relationship. For another, Guangxi connects China's east, centraland west. China's sustainable economic development entails 'industries complementing each other' and 'traffic connectivity', which will bring tremendous opportunities to Guangxi."

Beibu Gulf has already attracted a number of major projects such as Qinzhou oil refinery projects and Stora Enso, a Fortune 500 forest products company based in Finland.

"Stora Enso began to develop plantations in Guangxi in 2002," Stora Enso spokeswoman Cindy Zhang told Emerging China. "Now it is preparing the construction of a forest-paper-and-pulp integration in Beihai. Stora Enso sees great potentials in the Chinese pulp and paper industry, in Guangxi Beibu Gulf Zone particularly,"

So far this year, the Beibu Gulf Economic Zone has already shown its strong momentum of development, a sign to indicate its expansion potential. In January trade import and export in the Beibu Gulf zone exceeded US$1.3 billion, a record high.