The National Development and Reform Commission (NDRC) and the Ministry of Commerce
jointly issued a new government foreign investment directory on
November 30. It updates one issued in March 2002, and will go into
effect from January 1.
The detailed directory consists of various sectors the central
government is presently encouraging or discouraging, and experts
said it is in line with the country's World Trade Organization
(WTO) commitments.
The NDRC website www.ndrc.gov.cn?released the news on
Friday. A commission spokesperson said the update is aimed at
attaining such goals as allowing China to obtain more sophisticated
technologies.
For example, the government is encouraging foreign investors to
channel capital and research into sectors like production of
equipment used in improving the environment and manufacturing
electronic devices for vehicles.
Meanwhile, the government is accelerating the opening-up of the
service industry. Overseas investors will have a presence in
sectors such as film and TV production for the first time.
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As the most populous developing country, China enjoys comparative
advantages in labor-intensive industries, which were encouraged in
the newly updated directory.
Lin Yueqin, a researcher from the Chinese Academy of Social
Sciences, said on Sunday that the changes described in the
directory already give foreign investors nearly as many options as
domestic investors.
"But I should say, local governments should pay more attention
to the quality of foreign projects," said Lin, adding that
decision-makers should have a clear idea as to whether projects are
really necessary for locals.
China's opening-up, especially its WTO entry, has helped
overseas investment flow into the country. Since 2002, China has
absorbed actual foreign direct investment (FDI) worth more than
US$50 billion a year. The amount of FDI attracted in the first 10
months of this year reached US$53.78 billion, already exceeding
that for the whole of 2003.
But he blamed some local governments for paying less attention
to the social and environmental impact overseas projects bring.
Zhang Jianyu, visiting scholar with Tsinghua
University, told China Daily on Sunday that the
directory itself cannot play the decisive role in attracting
foreign investment.
"As China's?economy increasingly becomes market-oriented,
the market will have final say for foreign investment," said
Zhang.
(China Daily December 13, 2004)