China Monday urged foreign investors to start their businesses in "legitimate" development zones and warned not to be lulled by "too good to be true" preferential policies being offered in some places.

"Foreign investors should select sites at State and provincial levels, avoiding being lured to those at a lower level by 'too good to be true' preferential policies," said Hu Shanshun, a publicity official with the Ministry of Land and Resources.

Hu made the remarks as the country's most high-level inspection into the country's land market continues. Investigation of land use in various development zones and industrial parks is a priority.

The probe was launched by the State Council last Friday.

As many as ten groups, comprised of officials from the Ministry of Land and Resources, the National Development and Reform Commission, the Ministry of Supervision, the Ministry of Construction and the National Audit Office, have been dispatched on the ten-day mission.

But the whole inspection might take about two months, with another two batches of inspectors still to set off.

According to Hu, the inspection expects to wrap up with the cancellation of "a bunch of" illegal zones and industrial parks, which were established without proper certification, expanded without receiving necessary approval or which defied approved uses of the land.

However, Hu refuted claims that such a move might harm foreign investors who have, in most cases, trusted local governments and got lured into these zones or parks.

Hu said each case will be looked at individually, and the rights and interests of the investors will be respected.

"If the investment has just started, or not yet started at all, it is very possible that such projects could be brought to a halt," he said.

"But if the investment has already been put to use, there is no reason to tear down everything, although, a question mark might be placed on the fulfillment of originally promised services and preferential policies."

Moreover, he said, not many foreign parties have been involved.

The current inspection will not only produce a better ordered land market, but also improve the country's investment environment, said Ma Xuelu, director of the Management Committee of the State High-Tech Development Zone in Baoding, North China's Hebei Province.

"With the sorting out of those small zones and parks, investors can enjoy easier and better guaranteed choices," said Ma.

(China Daily August 12, 2003)