The country does not face an imminent risk of monopoly by
foreign companies in any industry, according to the China
Foreign Investment Report 2007 released by the Ministry of
Commerce.
Wang Zhile, director of the Multinational Enterprise Research
Center affiliated to the Ministry of Commerce, made the observation
in an essay for the report in response to people's rising concerns
about possible foreign monopolies in the country.
He explained that although foreign investors do have a large
market share in certain industries, it does not necessarily mean
monopolies.
The market share is usually held by different foreign-funded
enterprises that compete with each other and those who have a large
share do not use it to restrain competition in the market, which is
the nature of a monopoly.
China had approved the establishment of more than 610,000
overseas-funded companies by the end of July, with actual use of
overseas investment totaling US$720 billion, a Ministry of Commerce
official was quoted as saying by Xinhua yesterday.
The report was released in Xiamen, Fujian Province, yesterday during the China
International Fair for Investment and Trade (CIFIT) along with a
series of booklets introducing Chinese provinces and cities to
potential foreign investors, and guidelines for Chinese
enterprises' outward investment.
Policy Revisions
In a related development, Zhou Xiaochuan, governor of the
People's Bank of China, told the main CIFIT forum on Saturday that
the country is likely to adjust its financial polices to support
Chinese companies' outbound investment.
Revisions will be made to the current foreign exchange policies
that encourage currency inflows while limiting outflows, he
said.
The central bank will further develop the foreign-exchange
market to help companies hedge currency risks and simplify
procedures for companies investing outside.
"We will remove unnecessary controls on reviewing sources of
foreign-exchange funds and on foreign currency purchase and
remittance procedures to allow companies to use their own funds or
converted currencies to invest abroad," Zhou said.
The government also encourages qualified commercial banks to set
foot abroad by establishing branches or acquiring stakes in
overseas counterparts, he said.
(China Daily September 10, 2007)
