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Economy

Open doors still welcome foreign investment

By Lan Lan (China Daily)
Updated: 2010-04-15 07:16

China will continue to widen market access to foreign investors and better navigate the inflow of foreign capital, top officials said yesterday.

Meanwhile, the country will discourage both foreign and local capital from investing in resource-guzzling and polluting sectors to avoid paying too much for being the world's workshop, says a new directive.

"China remains the most attractive destination for foreign investment. We treat foreign companies that set up and register as Chinese companies, and products made in China as Chinese products. We give them national treatment," Ma Xiuhong, vice-minister of commerce, told a press conference.

The directive is a response to some outside complaints that China is reversing its foreign investment policies in the wake of several high-profile commercial cases involving big-name companies such as Google and Rio Tinto. Earlier this week, the government removed a rule requiring government buy computers and other products with "indigenous innovation".

Zhang Xiaoqiang, vice-minister of the National Development and Reform Commission, said China will facilitate trade and investment to maintain a competitive investment environment at a time when countries are vying for foreign investment to parry the impact of the financial crisis.

The directive, released on Tuesday by the State Council, China's Cabinet, also encourages foreign companies to participate in the reorganization and reform of domestic enterprises by mergers and acquisitions. Qualified foreign enterprises will be supported in bids to go public in China.

It also suggested deepening the reform of the foreign investment administration system by transferring power to local governments. Encouraged projects with overall investment below $300 million will be examined and approved by local governments instead of the central government.

Economists said the directive provides a clear signal that China welcomes foreign investment more than ever before.

"The directive sends a very clear signal that China not only remains hospitable to foreign investment, but is further open to it," said Zhang Yansheng, director of the Institute for International Economic Research under the National Development and Reform Commission.

The directive has shown the government's commitment to expand foreign investment as some items had never been put forward before, such as foreign mergers and acquisitions, said Han Qi, a professor at the University of International Business and Economics.

Meanwhile, the country vows to strictly curb both foreign and domestic investment in high energy-consuming and polluting sectors in an effort to optimize investment structure.

"China's energy consumption accounts for 18 percent of the world's total. China can't afford to continue to be the world's factory with high consumption of energy resources and high pollution," said Vice-Minister Zhang.