Zhejiang merchants, China's most active private investors, have listed China's major coal-producing province, Shanxi, as the top dangerous place for investment. Meanwhile, Shanxi officials are vigorously pushing forward a coal industry being restructured by cutting small privately owned mines.

Debt-embroiled Dubai in United Arab Emirates is the other place on the black list, as a preliminary investigation shows merchants from Zhejiang have lost about 2 billion yuan ($293 million) in real estate investment there, according to the latest research by the Zhejiang Merchants' Association for the Promotion of Investment.

Kunming, Lianyungang and 60 other cities were voted as "best cities for Zhejiang investors in 2010", which was also released by the association over the weekend.

"Shanxi has been listed because the ongoing government-guided coal industry restructuring there has harmed the normal operation and decision-making rights of enterprises," the association said in an open letter released along with the lists.

"This action, which goes against the spirit of a market economy, has brought serious damages to Zhejiang business people," the letter said.

According to the policy established by Shanxi last February, the government wants to cut the number of coalmines in the province by 30 percent by 2010 to consolidate the coalmines and companies. Under its plan, the number of coal companies would decrease from 2,200 to around 100, killing almost all private coalmines.

"We failed to set a communication platform between Zhejiang merchants and the government to solve the problem. The policies taken in the coal reform are worrying us," Cai Hua, secretary general of Zhejiang Merchants' Association for the Promotion of Investment told China Daily.

With the huge losses in the coal industry in Shanxi and real estate in Dubai last year, merchants from Zhejiang saw the hidden risks in those short-term investments.

"The investments in real estate in Dubai and coalmines in Shanxi opened a new field for most Zhejiang merchants. We have to make sufficient analysis to control the risks before entering the new field," Zhen Shengtao, chairman of Zhejiang Sunlead Group, said.

"I don't think the open letter will have any effect because the private enterprises hold a weak position in China's economic system," said Yin Xingmin, professor from China Center for Economic Studies at Fudan University.