April 11 (Bloomberg) -- Don't talk to Tobias Kerle about China's slowing growth, the general manager of Continental AG's 12-month-old tire factory in the city of Hefei is too busy planning to double output.
"We've been ramping up the plant at a speed more than double what we knew before," said Kerle, 42, at the factory in the capital of Anhui province, 400 kilometers (250 miles) inland from Shanghai. "Five years ago this city had small roads. They've been bulldozing things left and right, putting in flyovers, a new subway and an airport."
As rising wages and costs sap growth in the coastal centers that led China's 30-year export boom, Hefei's 15.4 percent expansion last year puts it in the vanguard of a new tier of inland powerhouses. Cities including Wuhan, Zhengzhou and Wuhu are drawing capital and factories from the east and abroad as companies such as Continental, the world's fourth-largest tiremaker, and Unilever, the world's No. 2 consumer-products maker, bet they will underpin the nation's next decade of growth.
"Cities in central China and even some in the west are becoming a new driving force for China's economy," said Zeng Xiwen, vice president for North Asia at Unilever in Shanghai.
"Hefei's got all the attributes investors need: land, energy and labor resources, rich education, ports nearby, talented workers and a huge consumer market on its doorstep."
Unilever, headquartered in London and Rotterdam, has shifted seven factories to Hefei from Shanghai and plans to make the city its largest global manufacturing center.
At least 25 more of the world's 500 biggest companies, including Zurich-based ABB Ltd. and Japan's Hitachi Ltd., have factories in the city. That's helped give Hefei a growth rate almost 70 percent higher than the 9.2 percent average for the country and almost double the 8.2 percent in Shanghai, China's financial capital.
David Fuller's view Old China hands have said it for years - don't think of China on a national basis, think regionally.
Clearly the world's Autonomies (sector-leading multinational companies) are maintaining and even increasing their manufacturing in China, locating and relocating in the regions and cities that offer the best prospects. In this respect China's regions are often competing with each other even more than other countries. This can only help to keep them competitive.
The challenge for investors is how to participate in this success.
In recent years the global Autonomies have boomed with the help of their Chinese production and also sales to this vast country with its rapidly growing middleclass. Autonomies which remain at the forefront of their sectors are a favourite, secular Fullermoney theme, for their earnings growth and increasing dividends.
Meanwhile, China's stock market is historically cheap and overdue for a cyclical bull market of its own.