Shandong saw an influx of $6.5 billion in foreign capital in the first 10 months of 2010, a nearly 14.3-percent increase over the same period of last year.

More than a third of the foreign-backed companies opened in the province since 1978, were established in the in the last five years, under the 11th Five-Year Plan.

That investment is also seeing a shift away from traditional labor-intensive companies to sectors like car manufacturing and shipbuilding, as well as tertiary industries like logistics and financial services.

The funding is coming mainly from Hong Kong, Taiwan, South Korea, Japan and the United States.

Hong Kong tops the list with $2.9 billion in total investment in nearly 400 projects in the first 10 months of this year. It accounts for nearly half of the province`s total foreign capital.

There are more than 30,000 foreign-backed companies, including nearly 150 of the Fortune 500, in this eastern province. They have brought in a total of $9.5 billion in capital.

Some of the big names are General Motors, Lucent, Microsoft, HP, Coca Cola, Siemens, Panasonic, Mitsubishi, Samsung and Hyundai.

The most popular destinations are major cities like Qingdao, Yantai, and Jinan.

Obviously this has helped the local economy. One example of this can be seen in shipbuilding: Samsung Heavy Industries, Hyundai and Daewoo have helped the province`s annual productive capacity in that area to triple since 2005.

General Motor`s vehicle production center has led to the establishment of 100 related businesses in the region.

As a result of all this growth, authorities have been screening investment proposals more carefully, especially those that are heavy polluters or energy consumers. And they have refused nearly 600 projects over the past five years because of environmental concerns.

By Liang Chen (China Daily Shandong Bureau)