"China is going to launch a reform in its investment system which will greatly facilitate foreign investment in China," said Jiang Weixin, vice minister of the National Development and Reform Commission (NDRC), at a Wednesday press conference.
Although strengthening laws and regulations and improving oversight are integral to the reform, its basic premise is, "less government interference, more investor independence."
This gives investors greater freedom to make their own decisions and ultimately makes them responsible for their own bottom lines.
The central government will continue to see that investors' legal rights are protected, while using macroeconomic controls and intermediary organizations to build a sound investment environment.
"Enterprises, banks and the government will play different and more independent roles after this round of investment reforms. Especially the banks, which will have a decisive say on whether they will lend money," said Jiang.
The government has so far been closely involved with banks' lending policies. That created lingering problems that still trouble the financial sector: mainly the bad loans that remain a huge burden to state-owned commercial banks, escalating financial fraud and scams, and listed firms that are of poor quality.
According to Jiang, all enterprises will get the green light to channel capital through a shareholding system.
"We will multiply financing channels so that enterprises can get capital not only through bank loans, but also from the stock and bond market," said Jiang.
Jiang also promised to replace the examination and approval process for Sino-foreign joint ventures with a simplified system that deals only with market access, financial security, environmental protection and resource utilization.
The number of foreign investment projects that require approval and oversight at the central government level will also be sharply reduced.
(China.org.cn July 29, 2004)
