Asia Times: China's shopping list for foreign investors


	June 13, 2001	atimes.com

China

China's shopping list for foreign investors

YANTAI AND TIANJIN - China will remain one of the world's most attractive regions for overseas investment. In the coming five to 10 years it will see further advances in reform and the opening up and improvement of its investment environment, says China's foreign trade minister Shi Guangsheng.

China has demonstrated great vitality in the past two decades of reform, Shi said while addressing the CEO forum of the Second Asia-Pacific Economic Forum (Apec) Investment Mart.

Indicative of China's increasingly foreigner-friendly investment environment is the fact that Tianjin, a northern China port city, attracted a total of US$806 million in overseas investment in the first four months of this year, up 42.4 percent from the corresponding period of 2000. The sharp increase is largely attributed to additional investment by 85 foreign-funded joint ventures, which have added US$630 million to their previous investment.

Meanwhile, China published a list of 228 major projects for foreign direct investment (FDI) worth a total of US$340 billion on June 10. The list was announced by Zhang Xiaoqiang, an official from the State Development Planning Commission, at a press conference of the Apec investment mart, which was inaugurated in Yantai City, east China's Shandong province, at the weekend.

These projects fall into infrastructure or high-tech fields, with one-third of them to be built in the country's underdeveloped western areas, Zhang said, noting that all these projects will enjoy preferential government policies including tax reduction or exemption.

According to China's development plan for the 2001-05 period, the country will take FDI as the key means to use foreign funds. The country will further improve policies and environment for foreign investment, expand the use of foreign investment, and improve the quality of using foreign funds, the official said.

He said that China will continue encouraging foreign investment in farming, high-tech, and export-oriented industries, infrastructure and basic industries; encouraging foreign investors, transnational firms in particular, to participate in the transformation of state companies; and pushing forward the opening-up of service sectors like banking, insurance, commerce, and tourism.

China will also continue to explore new ways of using foreign funds and create a better environment for overseas investment, especially in the country's underdeveloped western areas, he noted.

According to the official, over the past two decades, China has introduced more than $350 billion of foreign funds, with over 80 percent from Apec members.

China was the world's seventh largest economy in 2000 with its gross domestic product (GDP) exceeding $1 trillion. It became the world's seventh largest trader with its trade volume hitting $474.3 billion. Meanwhile, the country has remained the largest recipient of overseas investment among the developing nations for eight consecutive years.

Shi predicts that China's economy will grow at 7 percent annually, so that by 2005, the country's GDP is expected to reach $12.5 trillion. "China's development will surely provide immense opportunities for the business circles of all the countries in the world," he said.

Shi estimated that China's importation of equipment, technology, and products from 2001 to 2005 would add up to some $1.4 trillion.

China, facing its forthcoming entry into the World Trade Organization (WTO), has straightened out its existing foreign economic laws and made the necessary revisions and supplements to meet WTO rules and the socialist market economy, Shi said. The National People's Congress, China's legislative body, and its standing committee, have passed the newly-amended laws on overseas-invested enterprises, he added.

Shi pointed out that China's WTO entry will enable domestic and overseas enterprises to conduct open and fair competition and will provide more market access opportunities for overseas enterprises. On the other hand, China's WTO entry will further accelerate the country's economic liberalization, he added.

Shi noted that since the second half of 2000, the world economy has experienced sluggish growth and has entered a period for significant readjustment, which may lead to less and more cautious transnational investment deals. However, Shi said, the stable new market may be a focal point of investment. A US survey showed that the FDI confidence index towards the Chinese market is 1.69, the second highest in the world.

He stressed that China 's rapid economic growth and political stability have created preconditions for attracting more overseas investment to the country. The perfection of China's socialist market economic system as well as laws and regulations have optimized the investment environment in China. On the other hand, Shi said, China is stepping up with efforts for human resources development through the training of a large group of professionals in international economy, law, and trade.

China will provide more preferential policies to encourage overseas entrepreneurs to invest in the high-tech sector and set up research and development centers in China, Shi said.

(Asia Pulse)

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