The new plant is part of Chongqing's plan to become Asia's largest manufacturing base for notebook computers. Both HP and Taiwan-based Foxconn, one of the world's largest original equipment manufacturers (OEM) of motherboards, signed contracts with Chongqing in August to establish PC manufacturing plants in the inland city.

Taiwan-based Inventec, the world's fourth-largest ODM notebook maker, also inked a contract with Chongqing in late December to set up a manufacturing base there.

Taiwan-based Quanta, the world's largest ODM notebook manufacturer, will sign a contract with the city as well, an official surnamed Tu from the Chongqing Economic and Information Commission told the Global Times, without disclosing any details about the potential deal.

The China Business News (CBN) Wednesday quoted an unnamed insider as saying that Inventec plans to gradually invest in Chongqing's project by transfer of net profits gained to a capital account. Tu, however, denied the report.

Chongqing plans to become the largest PC manufacturing base in Asia by 2015, with notebook production exceeding 80 million units, according to a press release distributed at the Inventec's signing ceremony, the CBN reported.

Currently, notebooks produced globally total around 100 million units, with the output in China accounting for more than 90 percent. The potential 80 million units planned by Chongqing would the city the largest manufacturing base not only in Asia but in the world, said Liang Xiao, an analyst with CCID Consulting, a research, consulting and IT outsourcing service provider.

Chongqing has made efforts to improve its business environment to attract large PC manufacturers, Liang said.

The city, which has ample transportation infrastructure, launched a special logistics project for HP Tuesday to dispatch products for group users across 13 provinces and cities in China's central and western regions within five days. The project will help save logistics costs, which is important for notebook makers, given the declining profit margin in the industry, Liang said.

HP also launched a settlement center in Chongqing in September. Plans call for the Chongqing center to gradually take over as the company's global settlement center, which is currently located in Singapore. Liang said the move will improve the city's financial services and added that Chongqing has preferential policies, such as lower tax rates, compared with China's eastern region, which has also attracted enterprises to invest in the city.

The advantages mean manufacturers might transfer part of their operations to Chonging to lower costs, which is likely to impact China's current large PC manufacturing bases, including Shanghai, Shenzhen and Taiwan, Liang said.

Notebook makers have paid more attention to central and western markets, as competi-tion in first- and second-tier cities in China's eastern region is growingly fierce, while small-and medium-sized cities and villages in the central and western regions see less competition, Liang said.