Mega-cities Of Western China Business Cost Comparison Study

Business Cost is an important basis for measure of a country or a region's comprehensive competitiveness, The level of cost has become an important indicator of the investment environment when the local governments Promotion of local. Research of business cost has an important significance for enhancing the region's comprehensive competitiveness and promoting the rapid development of the regional economy. In recent years, with further in-depth development of the west, workers wages, land prices and office costs have been greatly enhanced. Well, what's the overall situation of business cost in the western city today? Which deficiencies are more serious? Whether the high business cost hindered the scale and process of introduction of foreign investment in the western? Therefore, by comparing the cost of the situation of large cities in the western region and learning about the strengths and weaknesses in cities have great practical signification.In this paper, after summarizing the influential factor of location investment decision and massive of domestic and foreign relevant research on business cost, on this basis, we defining the connotation of business cost and divide it into to three parts including factor costs, transaction costs and other costs. The factor costs include labor costs, land use fees, Technical resources indicators, integrated elements; Transaction costs include market development indicators, infrastructure indicators, corporate tax index, the development of related industries indicators, the market size and capacity indicators, the speed of market development and potential; the other costs include openness of region, social security index, the climate of international investment indicators. On this basis, we establish a comprehensive evaluation index system including three class of variables, based on a large number of statistical data, and then take the massive objective statistical data as the basis, we chose the mega-cities in western China-Nanning, Chongqing, Chengdu, Guiyang, Kunming, Xi'an, Lanzhou, Urumqi as research targets. By established factor model, calculation of factor scores and rankings, finally, we extract the four main factors include the endowment of factors, the potential factor, the government factor and cost factor. We get the ranking from low to high followed by Kunming, Chengdu, Guiyang, Lanzhou, Chongqing, Nanning, Xi'an and Urumqi. Then we compare the business conditions and analyze the superiorities and insufficiencies of business cost in various cities, and analyze the development and changes of status of all city business costs between 2003 and 2007. At the same time, we discuss the influence mechanism of business cost to regional economic development and suggest that we should dialectical treat to all the city's business cost, the modest rise of business costs is due to the regional economic development demand of productive factors. At the last part of this paper, we put forward countermeasures and suggestions for how to effectively control the eight large cities in western China, such as develop infrastructure, foster the market organization, regulate the market players, play industrial clustering effect and improve the matching capabilities of industry, increase the investment in science and technology.