Although still welcoming all kinds of foreign investment those
involved in advanced technologies would be given a particularly
warm reception, Chinese Vice Premier Wu Yi assured executives of multinationals
attending a symposium on Thursday.
She told the business delegates that foreign investment has to
serve the needs of China's industrial restructuring.
The Industry Guide for Foreign Investors is to undergo
its third revision since 1997 in the expectation of channeling more
investment into research and development centers, new high-tech
industries, advanced manufacturing, energy conservation and
environmentally friendly sectors, said Wu. She chaired a seminar at
the symposium in Xiamen of east China's Fujian Province.
Investment helping to upgrade China's agriculture, service
industries and traditional manufacturing would also be encouraged,
she explained.
Although China had been the largest recipient of foreign
investment among all developing nations for 15 successive years
much remained to be done to improve both its quality and quantity,
Wu observed. ?
She cited a report given to the UN Conference on Trade and
Development which noted in 2004 China attracted per capita foreign
investment of US$47. This was much lower than the US$534 per person
invested in developed countries and well below the world average of
US$107.
Jin Bosheng, a research fellow with the Research Institute of
the Ministry of Commerce, said China was showing particular
interest in new high-tech industries especially electronics,
biology, petrochemicals and medicines. Such changes clearly
indicated the country was seeking to redirect foreign investment,
he said.
Amid growing domestic concern that surging foreign trade wasn't
bringing substantial benefit to people in central and western China
the investment regulators are now focusing on upgrading industries
in the poorer inland areas of the country.
Assistant Minister of Commerce Yi Xiaozhun recently revealed a
plan to encourage first-generation foreign investors whose
businesses mainly focused on low value-added processing to move to
the less developed interior. East coast business centers, the
original frontier of China's new economy, could then refocus
development on more lucrative high-tech industries.
Although that plan received an icy response from foreign
investors China has revised a series of regulations on such
investments. The latest revision involves a regulation due to come
into effect on Friday which standardizes rules on acquisitions and
mergers of Chinese companies by foreign investors.
After a number of foreign companies recently encountered
difficulties acquiring Chinese businesses there's been speculation
that consideration is being given to tightening foreign investment
controls.
Vice director Guo Jingyi of the Law and Regulation Department of
the Ministry of Commerce refuted the speculation and cited new
rules which, for the first time, will allow share swapping between
foreign and Chinese companies involved in mergers and acquisitions.
"We've opened a new channel for foreign mergers and acquisitions,"
he said. In the past the most common form of foreign investment in
China was factory building.
Justin Lin, director with the China Center for Economic Research
of Peking University, said it was time China started to get picky
with foreign investment. China's current policies of attracting
such funds were?adopted 27 years ago when the country was keen
to access investors and foreign currencies.
"While China's foreign currency reserve surged to US$875.1
billion in March -- the highest in the world -- our priority now is
not to attract as much foreign investment as possible but to bring
in new high-tech industries which we currently don't have," he
said. "I've no doubt that preferential policies will only remain
for certain kinds of foreign investors," Lin added.
(Xinhua News Agency September 8, 2006)
