Sanhe City mayor Zhang Jinbo assured Indian businessmen that the cost of operation out of the Zone, in China's Hebei province, would be about 30 per cent cheaper than Beijing and other industrial zones in that country.

Jinbo, who is leading a delegation on a visit to attract Indian investments into China, said Yanjiao was keen on attracting investments in the areas of information technology, pharmaceuticals, food, advanced material and light chemical industries.

Over 3 billion yuan has been spent in the region in the last ten years on developing infrastructure such as road, power, water, drainage systems, telecommunications, and gas, among others, to provide a conducive environment for investors.

Yanjiao, as does other areas of China, offers incentives such as exemption of income tax for the first two years of booking profits and 50 per cent tax reduction for the following three years.

The zone's geographical proximity to Beijing's international airport and the Tianjin sea port makes it an ideal strategic location, and provides a platform for investors to serve the domestic as well as global markets, said Xu Chun Sheng, vice-mayor of the Sanhe People's Government and director of the management committee of Yanjiao Economic and Technological Development Zone.

Yanjiao province houses 20 scientific research institutes and eight universities and produces over 50,000 graduates and post-graduates every year.

Over the last ten years, Yanjiao Zone has attracted more than 700 domestic and international projects on a total investment of 20 billion yuan. It has attracted investments from 25 countries, which include the US, Italy, Canada, Germany, Korea, Malaysia, Hong Kong and Taiwan.

Chennai-based Carborundum Universal, makers of abrasives and ceramics and part of the $1.6-billion Murugappa Group, was the first Indian company to set up operations in the Yanjiao zone.

Carborundum, through a joint venture with Jingri, a leading synthetic diamond manufacturing company in China and China Engineering and Exploration Bureau, promoters of Jingri, is setting up a 2,000-tonne bonded abrasive plant in the zone.

M M Murugappan, chairman, Carborundum, said the company established its relationship with Yanjiao province five years ago to source products and sell them in India.

Over the last five years, the relationship has grown into a partnership and the company has been witnessing rapid pace of economic development in the region, he added.

The China plant of Carborundum is expected to go on stream this year. This joint venture is expected to help Carborundum manufacture cost-competitive abrasive products in China for overseas markets, including India. In addition, joint venture partner Jingri will market Carborundum's products in China.