Foreigners are likely to acquire more investment opportunities in
China since the central government approved a fresh regulation on
Tuesday to attract foreign capital.
The regulation, which will take effect on April 1, outlines how
China will expand cooperation with foreign investors.
In
particular, it appeals for capital in agricultural technology,
transportation, energy and new material industry.
The service industry -- including banking, telecommunications,
securities, insurance and tourism -- will gradually become another
focal point of cooperation.
In
the last 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. An official with the
State Development Planning Commission (SDPC), the state's highest
economic planning authority, said the new foreign investment
guideline was tailored to the commitments China had made before it
became a World Trade Organization (WTO) member.
Compared with the old foreign investment guideline, the government
has given foreigners more investment opportunities.
Bai Hejin, president of China Academy of Macroeconomics Research
under the SDPC, said China's WTO entry boosts economic cooperation
with foreign countries, and investors and the government should
meet the opportunity.
"China's WTO membership has reduced risks and cost for foreign
investors, and more capital and advanced techniques and expertise
are expected to flow in," Bai said.
However, the country hopes foreign investors start businesses in
the western regions, where they will enjoy more favorable taxation
policies for the next 10 years, according to the investment
guideline.
From 2001 to 2010, income tax will stay at 15 percent if
enterprises invest in industries encouraged by the government.
In
addition, the government encourages foreigners to take part in key
state-owned enterprises (SOEs) reform.
According to the regulation, overseas investors are expected to
become shareholders in key SOEs.
The government is planning to sell a certain amount of SOE shares
to foreigners over the next five years to speed up the
restructuring of SOEs, an SDPC source said. The official refused to
be identified. Overseas investors will even be allowed to hold the
controlling stake in large SOEs, except for those of key importance
to national or economic security, the commission official said.
(China
Daily February 27, 2002)