An underground and rail equipment manufacturing project started construction on Friday in Urumqi, capital of northwest China's Xinjiang Uygur Autonomous Region, which aims to be a manufacturing base in the west region.

With an investment of one billion yuan (164 million U.S. dollars), the project mainly produces high-end underground mining and tunnel construction equipment, said Liu Feixiang, chairman of China Railway Construction Heavy Industry Co. Ltd.

By building a high-end equipment manufacturing base, companies can participate in Xinjiang's development and sell their products to central, west Asia and east Europe via the region's opening-up, said Liu.

The project will be completed by July 2016. It is located in the Urumqi Economic and Technological Development Zone in Toutunhe district.

Industries such as energy development and equipment manufacturing in the eastern areas have accelerated their transfer to the west.

In recent years, the Urumqi economic zone has attracted investment from Shaanxi Automobile Group, Sany Group and Dongfeng Motor Corporation, etc. Last year, CSR Zhuzhou Electric Locomotive Co., Ltd signed an agreement with the zone to invest 3 billion yuan in high-end rail transit manufacturing.

In the future, subways, mining and water works projects in Xinjiang can use locally produced equipment.