Liberty Mutual's proposed branch in Chongqing would be the first overseas insurance business in western China. All other foreign insurers opened branches in Shanghai and Guangzhou on the prosperous east coast.
One possible investment is a chain of liquefied natural gas stations serving Chongqing city taxi fleets, said Tim Tuttle, president of Newport Pacific Management, whose US$2.8 billion of assets include Liberty's fund.
``Liberty Mutual asked us to begin increase its investment presence and investment activity in Chongqing,'' Tuttle said.
``Clearly there is no public equity market there, so our only approach was to go in and attempt to do private equity deals.'' Manufacturing firms have had an easier time of it, by taking advantage of low labor costs. The region's per capita annual income is about two-thirds China's $850 average. That makes it cheaper for Briggs & Stratton to make cast-iron engine blocks in Chongqing for Filipino fishermen because it can't sell its products in the Chinese market.
General Motors Corp affiliates Isuzu Motors Ltd and Suzuki Motor Corp already make light trucks and cars in Chongqing. GM is in talks to buy a third of Luizhou Wuling Automobile Co, a minicar maker based in southern Guangxi province, which is also included in western development plans.
`The government has made it clear that it would like to see western expansion,'' said General Motors spokesman Alan Adler.
The government is also trying to lure Hong Kong investors.
Hong Kong Chief Secretary Donald Tsang led a group of 220 businessmen on a 10-day junket through the region last month.
Nevertheless, Chongqing has a ways to go before it can convince foreign investors it offers more gain than pain. `You find a lot of Western businessmen who come here for the trade fair, then just leave after one day, without signing deals,'' said Scotiabank's Chen.
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