Foxconn intends to cut costs as local governments in Henan have vowed to provide preferential treatment in terms of land use, taxation and logistics services.

Analysts forecast Foxconn's move inland might prompt other manufacturers to follow since establishing a business in coastal areas has become more expensive.

Officials of Guangdong Province said in May that projects with low added value should be moved to inland, and Foxconn must cut its employees engaging in low-end production to 100,000 in Guangdong.

Bank Merger

Ping An Insurance (Group) Co. of China Ltd., China's second biggest insurer, is considering merging its banking unit with Shenzhen Development Bank Co. (SDB) to get around rules preventing insurers from controlling more than one lender.

Ping An Insurance has stakes in two banks—Ping An Bank Co. and SDB.

Ping An Bank and SDB, both based in the southern city of Shenzhen, are working on an "unprecedented major restructuring," according to announcements from both companies on June 29. Shares of Ping An Insurance and SDB were recently suspended from trading.

Combining Ping An Bank and SDB would give Ping An Insurance control of a lender with 809 billion yuan ($119 billion) in total assets and help it avoid falling foul of regulations barring insurers from exerting power over two banks. Ping An Insurance is buying a 29.99-percent stake in SDB.

"You don't want to pitch your own units against each other," said Luo Yi, a Shenzhen-based analyst at China Merchants Securities Co. who called the insurer a "strong buyer."

"The merger would extend Ping An's reach in the banking market and broaden its customer base."

Financial Prowess

The Shenzhen-based China Development Institute (CDI), a think tank of the State Council, recently released the 2010 China Financial Center Index, providing a financial map of the country.

For the second consecutive year, Shanghai claimed the title as China's top financial center, followed by Beijing, Shenzhen, Guangzhou and Hangzhou. The biggest improvement was made by Chongqing, which moved up 13 spots to No. 8.

The index analyzed 29 cities across the country, assessing many factors including the financial industry, institutions, markets and environment.

As the axis of global financial industry shifts eastward, Chinese cities including Beijing and Shanghai are on course to become top players in the world's financial game.

"Compared with Shanghai, Beijing's financial market scale has become a stone around its neck as it battles for a place in the world financial club," said Zhang Jiansen, editor-in-chief of the index and a senior research at the CDI.

The Shanghai Stock Exchange is the beating heart of Chinese financing industry, much like the New York Stock Exchange is to the United States. The Shanghai Gold Exchange and Futures Exchange are also important to China's financial market.

"But Shanghai has problems of its own," said Zhang. "Vigorous efforts are still needed to improve its social welfare system and appeal to financial institutions."