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China's investment environment improving: minister

China.org.cn, July 11, 2012

• Employees?check solar panels at a workshop in Hangzhou, Zhejiang Province.

  China has taken targeted measures to improve its investment environment to create a more even playfield for foreign companies, vice commerce minister Wang Chao said at a news conference in Beijing on Tuesday.

  "Since the reform and opening-up policy was adopted 30 years ago, China has taken great efforts to improve its investment environment for foreign companies, including increasing transparency of laws and regulations and streamlining efficiency of administration," Wang Chao told reporters in Beijing.

  His remarks came as a response to a survey released by the EU Chamber of Commerce in May. The report said that over 20 percent of EU firms in China are considering withdrawing their business from the country.

  The report confirmed that China is becoming an increasingly important strategic market for European enterprises. China comprises more than 10 percent of global revenue for half of the respondent companies, representing an increase of 50 percent since 2009, according to the chamber report.

  But it also presented growing concerns among respondents over rising costs, a stalling regulatory reform and increasing barriers to market access.

  Wang said a lot of efforts have been made to boost IPR protection, referring to a 9-month campaign initiated by the government to crack pirated and counterfeit goods nationwide.

  "Those efforts are part of China's target to create an open, fair and transparent market," he said.

  "We treat foreign and domestic companies equally," he added.

  The EU is China's largest trading partner, but foreign direct investment in China from the EU dropped 27.9 percent in the first four months from a year earlier, according to Ministry of Commerce data.

  While the EU is mired in a worsening recession, the United States has leapfrogged the EU as China's biggest export market in the first half of 2012, a customs official said Tuesday.

  "While the failure to find a proper solution to fix the EU crisis adds uncertainties to China's economy, a "re-shoring" in manufacturing sector is looming large," said the minister. "We notice that many US manufacturers have pulled productions out of China and returned to the US."

  He attributed the shift partially to the rising land prices and labor cost, but he said the most important factor behind the exodus is a strategy that the US is taking to bolster its manufacturing back at home.

  But he believed that China still has every reason to be optimistic in attracting foreign capital. "China has a stable government and growing economy," he said. "Particularly, China has a huge market that no one can afford to ignore."

  "Emerging markets still outperform other regions. The US and EU companies still look at them as their most popular investment recipients."

  According to a recent report "World Investment Report 2012," released by the United Nations Conference on Trade and Development (UNCTAD) on July 6, China is considered as the most favored investment destination globally, followed by the US and India, showing foreign investors' confidence in the world's second-largest economy.

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