The world's largest chip maker Intel recently announced it will move its Shanghai factory to Chengdu in West China, in order to improve its cash flow in the financial crisis.

Intel is not the only company shifting its focus from the developed east coast to the cheaper West China. More than one-fifth of the Fortune 500 companies have established branches or representative offices in West China. Preferential economic policies, a cheaper workforce, and sufficient raw materials and natural resources are attractive to investors looking for opportunities in both the short and long term.

The move west has significantly boosted West China's economy and helped forge a mature legal market.

A promising investment region

Despite the bleak outlook for China's economy, West China is less dependent on export industries and remains a high growth market, offering foreign companies a wide range of business and investment opportunities.

With an improved and coordinated range of policies and instruments that are more competitive in securing investment, increasing numbers of companies are seizing opportunities in the region. The move will also bring more legal business to the growing market.

As a result of government incentives for projects developed in West China, Chongqing continues to open, especially after becoming directly controlled by the central government, says Song Gang, an official from Chongqing Foreign Trade and Economic Relations Commission in charge of FDI. "The speed of development is quicker than ever," he said.

Chengdu has also achieved similar investment advances in the past year. According to the Chengdu Industrial and Commercial Administration Bureau, there were 246 new foreign companies registered in the city, with a total investment value of US$4.74bn funded, a 47.44% increase from 2007.

Chengdu is the fourth city - after Beijing, Shanghai and Guangzhou - in terms of the number of consulates it hosts. Eight countries - the US, France, Germany, Singapore, South Korea, Thailand, Pakistan and Philippines - have set up consulates there and other countries, such as the UK, the Czech Republic and Australia, plan to launch an official presence there soon.

Legal market  to flourish

A densely populated region, West China has been slow to develop and shape a legal market. But now West China is catching up, a series of legal-related projects having been inaugurated in the region.

Opportunities are growing, but so is the competition. Until now, there have been more than 30,000 lawyers practising in about 3,000 firms in West China, with an annual income of more than RMB2.1bn (US$306.8m).

Local firms have developed rapidly in the past few years. Cheng Shoutai is the founder and director of Chengdu-based Tahota, a member of the London-based Lovells' Sino-Global Legal Alliance. He told ALB China that the firm has made good progress since its establishment in 2000. "With the increase of foreign-related business, the demand for quality lawyers is higher than ever. Having developed over the years, Tahota has more than 30 lawyers and can undertake work in five foreign languages," said Cheng. "We have expanded our business to overseas, and this year will see a new Hong Kong office."

Han Deyun, head of Chongqing's pioneering firm Solton & Partners, another Sino-Global Legal Alliance member, is attuned to the potential of the regional legal market. "West China has 30% of China's population, but only around 10% of the overall income of the whole legal market. We have more potential for growth compared to the mature markets in the coastal regions," he said.

Beijing law firms have been in the forefront of domestic firms establishing a presence in the west. Leading firms, including King & Wood, Kaiwen, Dacheng, Zhonglun W&D and Guantao, have set up branches in Chengdu or Chongqing; some have branches in both cities.

Hong Kong firm P C Woo & Co was one of the earliest firms not headquartered in mainland China to have an office in Chengdu.

Many international firms still do not have a presence in the region, as most clients are based in coastal cities. Local firms are eager to learn from leading international firms and to this end are seeking international cooperation.

Additional legal facilities are on the way. Last year, in response to more disputes arising out of business in the region, the China International Economic and Trade Arbitration Commission (CIETAC) launched its Southwest Sub-Commission (CIETAC-sw) in Chongqing on 5 January 2009.