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Prosperous Jiangsu Province in East China is to open the doors on many new areas of its service industry to overseas capital.
The move comes in a bid to improve the overall quality of the sector, sources from the development planning commission of the province said.
According to a recent circular issued by the commission, overseas capital is welcome in areas such as transportation, postal services and telecommunications, wholesale and retail, real estate, public welfare, personnel training, broadcasting, television and film production.
"The opening of these areas to overseas capital conforms with China's commitments to the World Trade Organization and will speed up reforms in the province's service sector," said Chen Aiping, an official with the Jiangsu Provincial Development Planning Commission.
Over the years, the province's service sector has co-operated with overseas firms on more than 6,400 projects, with an actual investment of US$6 billion.
For example, several large real estate development companies and training institutions have benefited from a large influx of capital from overseas firms, including some multinationals.
Yet that investment has been mainly concentrated in the areas of real estate, tourism, education and logistics.
"The use of overseas capital in these areas has boosted their development, but many sectors of the service industry are still in a state of monopoly which hinders overall development," said Chen.
He added that the new policy is to offer a uniform, fair and open mechanism for all forms of capital, so as to break monopolies.
Greater levels of overseas capital are being sought for retailing, after France's Carrefore, Germany's OBI and Metro and Trust-Mart from Taiwan Province have established distribution centres and stores in major cities in the province.
Wal-Mart has already signed a contract with the local government to open a shop in the centre of Nanjing, the provincial capital.
The circular states that overseas companies are permitted to hold controlling stakes in some areas, such as tourism, personnel training institutions and medical services.
It also allows foreign law firms to establish offices in the province for the provision of services to foreign businesses.
In the future, State, private or overseas capital will receive equal treatment, said Chen.
(China Daily November 8, 2002)
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