China is now working out regulations to allow foreign investors to buy the country's small and medium-sized enterprises, a senior official from the State Economic and Trade Commission (SETC) told an ongoing forum in Xiamen on Sunday.
Xu Ming, vice director of SETC's Department of Foreign Economic Coordination, said that the new regulations will give foreign investors access to holding shares of, control or even buy out Chinese small and medium-sized enterprises, except for those in certain industries.
Xu said at a forum on investment cooperation between Chinese and European enterprises that Chinese small and medium-sized enterprises lack the competitive edge of their counterparts in developed countries. It is now especially important for the Chinese government to invigorate these enterprises in face of the global trend of mergers and acquisitions.
The official also said that the Chinese government will take measures to support foreign enterprises to participate in China's reform of these small and medium-sized firms.
Officials from the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) said here that China's impending entry into the World Trade Organization (WTO) will help to broaden the scope of Chinese businesses open to overseas investment and allow overseas investors unprecedented opportunities to enter the Chinese market.
Xu Ming said that the Chinese government will try to attract foreign investors to China's small and medium-sized enterprises, by establishing a sound credit system, expanding credit lines to the businesses, and allowing them to go public on domestic and overseas stock markets.
The Chinese government also encourages foreign venture capital to be directed toward China's efforts of upgrading its small and medium-sized enterprises and vows to better regulate China's market system so as to safeguard the legal rights of foreign investors.
China now has some 8 million small and medium-sized enterprises, which play a key role in the national economy. The gross industrial output, tax contribution and export of these enterprises account for 60, 40 and 60 percent of the national total respectively.
(Xinhua 09/10/2001)
