This comes as an inflation-driven labor shortage is gripping many factories and processing plants located in the relatively affluent Yangtze River Delta area around Shanghai.

The delta area was among China's first coastal regions open to foreign trade and market economic-oriented reforms. As the region grows richer, costs of business, especially costs of labor, begin to pressure factories that previously survived on the abundant supply of manual labor to move .

Analysts said industrial zones are being set up in many provinces where the Yangtze passes. Companies manufacturing steel, energy, automobiles, machinery, and electronics are especially concentrated along the Yangtze.

Qin Zunwen, a deputy dean of the Academy of Social Sciences of Hubei Province, said industries along the Yangtze are likely to be the engine of China's economic growth in the coming years.

Qin said the development of the Yangtze industrial belt received a boost recently by the State Council's approval to set up a sprawling economic zone near the western sections of the Yangtze.

Known as the Cheng-Yu (Chengdu-Chongqing) economic zone, the planned area will include 31 districts and counties in Chongqing Municipality and 15 cities in Sichuan Province, according to the blueprint approved by the State Council last week.

The economic zone is also expected to become a major modern industrial base for the entire country by 2015.

Xu Fengxian, a senior researcher at the Economic Research Institute of the Chinese Academy of Social Sciences, said the central government is expected to adopt preferential policies concerning government investment, financial transfer payment systems and tax collections to facilitate the economic zone's development.

At least 83 important projects, including wind power, railways, Chang'an automobile, and Foxconn chip projects in Chongqing, will benefit from the policies, analysts said.