(Yicai) Dec. 26 -- Shanxi province in northern China is offering foreign-backed businesses which meet certain criteria up to CNY10 million (USD1.4 million) in pay backs, as the country’s inland regions look for ways to lure more overseas investment.

Businesses with foreign investment of over USD10 million will receive 5 percent of the actual funds used as a reward, according to the new policy. While multinationals with assets exceeding USD50 million will be reimbursed 10 percent of the actual funds used if they set up their regional headquarters in the province. Both incentives are capped at CNY10 million per company.

Shanxi province is greatly encouraging foreign firms to participate in the development of its coalbed methane and shale gas industries as well as its new and clean energy sector.

In the first 10 months, foreign investment in the province surged 41 percent from a year earlier to USD950 million. Inflows into the mining industry soared 72.4 percent, and that into the electricity, heating, gas and water sectors was also considerable.

“The central and western parts of China are becoming more attractive to foreign capital, particularly in the manufacturing sector. And the fields of energy and environmental protection are also very attractive," Lin Boqiang, president of China Institute for Studies in Energy Policy at Xiamen University, told Yicai.

Other inland provinces are also coming up with new ways to attract foreign capital. Earlier this month, the Henan arm of the National Development and Reform Commission said it has introduced a new policy that more precisely meets the needs of foreign-funded projects by guaranteeing factors such as land use and energy consumption as well as by facilitating the approval process.

Inner Mongolia will roll out additional measures to optimize the environment for foreign investment, enable the formation of an opening-up platform and kick off the construction of the China Inner Mongolia Pilot Free Trade Zone, according to the region’s department of commerce.

The actual use of foreign capital in China climbed 8 percent last year from a year earlier to USD189.1 billion, of which that in the central and western regions leaped 21.9 percent and 14.1 percent respectively.

Editors: Shi Yi, Kim Taylor