Tuesday to inject confidence to overseas companies for expansion in
western China, but overseas firms said they are more concerned
about a transparent legal framework than incentives.
Sun Zhenyu, vice-minister of the Ministry of Foreign Trade and
Economic Cooperation (MOFTEC), Tuesday said the State would grant
preferential policies, such as tax breaks and loans, to overseas
companies in China that are marching to the west for business
expansion.
Sun said preferential policies have been successful since China
launched its Go-West campaign in 1999. Some overseas companies in
the east have already reaped fat profit after heading to the
west.
The State eased its control over overseas enterprise expansion last
year, allowing them to invest in companies in the area and set up
independent companies.
Yet while the moves are focused on attracting overseas funds,
overseas investors attending the seminar said preferential policies
were not as important as improving the integrity of the investment
environment.
"We need more transparent regulations and efficient services,
instead of preferential policies and cheap labour,'' said Dong
Weicheng, a manager from the Japanese Komatsu (China) Ltd.
Kerry Brown, first secretary of the British Embassy to China, also
agreed that unclarified regulations scare away foreign
companies.
"Foreign companies are confused about local regulations, which are
quite different here and there in the west,'' Kerry said. Others
chimed in their concerns, too.
"Policy makers have to focus on developing an even more transparent
and consistent framework based on the law,'' Cui Jianguo, an
official from the International Finance Corp, an investment
instituion under the World Bank. "They need to foster a more level
playing field and remove barriers of entry. They also need to
improve the protection of private property rights and introduce
greater fairness, transparency and consistency in the taxation of
private firms."
A
MOFTEC official said more detailed regulations to improve the
investment environment for foreign companies will come out after
China's entry into the World Trade Organization late this year.
"But that would be a step-by-step process,'' the official said.
Sun said Tuesday's seminar provided an unprecedented opportunity
for overseas companies in the east to seek expansion in the
west.
(China
Daily 09/05/2001)