Deputy secretary-general of the
State Economic
and Trade Commission (SETC) Gan Zhihe recently pointed out that
the area which attracts the most foreign investment into China will
shift from the industrial sector to the service sector. In addition
to the many Joint Ventures (JVs) being established in the agency
industry, the government will attempt to lure more foreign funds
into areas of finance, accounting, asset evaluation and law.
Great changes in foreign investment have taken place since China's
entry into WTO, Gan said. Transnational mergers and share transfers
have become the main form of foreign investment. The capital used
by foreign investors to merge state-owned enterprises, has
obviously been rising, together with an increase in the total
number of mergers being approved by the Chinese government.
Currently, among them, the largest merger case has involved several
billion dollars.
The financial sector will be an important field for China in
attracting foreign capital, he stressed. In the securities market,
foreign institutional investors will be permitted to establish JVs
with Chinese holding companies, and to increase the transaction of
bonds, B shares, and management funds.
In
the finance and insurance field, restrictions on clients operating
with overseas banks and insurance companies will gradually be
withdrawn. Foreign banks are expected to enter into RMB operations,
while overseas insurance companies will be permitted to run
property insurance, reemployment insurance, and some forms of life
insurance services.
Foreign capital is set to participate in the reconstruction of
joint-stock holdings in domestic commercial banks. In order to
optimize their stock structure, joint-stock commercial banks are
allowed to cooperate with overseas strategic investors. In
addition, some domestic insurance companies are also encouraged to
attract additional overseas funds.
(china.org.cn by Tang Fuchun, September 19, 2002)