The Chinese government is set to attract more foreign investment in
those sectors which used to be "forbidden zones" for foreigners --
starting on April 1.
Fresh investment opportunities will take place in
telecommunications and urban infrastructure, such as heating and
water supply and treatment.
This breakthrough in China's foreign investment policy was included
in the nation's newly-revised foreign investment directory.
The directory, which will take effect since April 1, was recently
set down by the State Development Planning Commission (SDPC), the
State Economic
and Trade Commission and the Ministry of Foreign
Trade and Economic Cooperation.
It
was based on investment guidance approved by the State Council last
month stating how China will expand cooperation with foreign
investors.
In
the new directory -- which is available at www.sdpc.gov.cn -- the
government has made public the State's investment priorities, and
what sectors are open to foreigners with restrictions and what
areas are still forbidden to overseas investors.
In
particular, it appeals for capital in agricultural technology,
transportation, energy and the new materials industry.
The service industry -- including banking, telecommunications,
securities, insurance and tourism -- will gradually become another
focal point of cooperation.
In
the past two decades, China has mainly opened its manufacturing
industry to overseas investors, and the nation will continue to
encourage foreigners to invest in basic industries, infrastructure
construction and environmental protection.
The new foreign investment directory is tailored to the commitments
China made to become a member of the World Trade Organization
(WTO), said an official with the SDPC, the country's highest
economic planning authority.
Compared with the old foreign investment directory, which has been
in effect since the end of 1997, the government has opened more
sectors for foreigners to invest in.
China's WTO entry has boosted economic cooperation with foreign
countries and investors, and the government should grasp the
opportunity, said Bai Hejin, president of China Academy of
Macroeconomics Research under the SDPC.
"China's WTO membership has reduced risks and costs for foreign
investors, and more capital and advanced techniques and expertise
are expected to flow in," Bai said.
China maintained a stable growth in foreign investment despite the
slowdown in the world economy.
According to official statistics, the global flow of FDI (foreign
direct investment) dropped 40 percent last year to US$760 billion
compared with US$1.3 trillion the previous year.
And due to the global economic slowdown, it is not expected to
witness a swift surge this year.
However, in the first two months of this year, China approved 3,963
foreign-funded companies with contractual and actual investments of
US$11.4 billion and US$5.9 billion respectively, up 23.7 percent
and 24.4 percent compared with the same period last year.
"This is due to China's rapid economic development, which has
enhanced investor confidence, and the ever-improving investment
environment," said the SDPC official.
(China
Daily March 19, 2002)