Chinese Ministry of Commerce publishes guidelines on foreign investment for 2007
26/3/2007 16:33
China will encourage foreigners to invest more in service sector and
high-tech companies this year while strictly restricting overseas investment in
real estate projects, according to guidelines on foreign investment recently
issued by the Ministry of Commerce for 2007. The administrative rules for the
current year say local governments and related departments should pay more
attention to the quality of use of foreign investment. According to the
guidelines, foreign investment should be channeled into high-tech, modern
service and high-end manufacturing sectors and into research and development,
energy-efficient and environmental-friendly projects. This year China will
continue to channel foreign investment into technical upgrading projects for
traditional industries and encourage transnational companies to establish
regional headquarters and launch procurement, distribution, operation and
training centers on the Chinese mainland. The guidelines require that
overseas resources should be utilized to expand domestic capital markets and
foreigners' strategic investment in Chinese listed companies should be
regulated. Foreign investors' cooperation with peers from China's non-state
sector will be facilitated. Meanwhile, the guidelines stress that foreign
investment should be strictly restricted in real estate sector and low-standard
projects with high energy consumption and serious pollution. The guidelines
also say that healthy development of mergers and acquisitions by foreign
investors should be promoted, and that monopoly-targeted and malicious takeovers
be prevented so as to maintain the nation's control over strategic sectors and
ensure national economic security. According to the Ministry of Commerce,
last year China approved establishment of 41,485 overseas-funded enterprises,
down 5.76 percent from the previous year, and used US$69.5 billion in foreign
capital, down 4.06 percent. The ministry said under China's macro economic
control scheme, no foreign investment projects in the overheated steel, cement
and electrolysed aluminum sectors have been approved since 2005. Meanwhile,
more foreign capital flowed to the high-tech telecom equipment manufacturing and
computer production sectors last year. The telecom equipment sector recorded a
61.4 percent growth in foreign capital actually used, while the computer sector,
a 48.63 percent growth. The ministry said foreign-funded firms performed well
in China and contributed significantly to the nation's economy. In the first
11 months of last year, they realized US$937.5 billion in foreign trade, up 25.5
percent. The volume, accounting for 58 percent of the nation's total, included
US$509.6 billion in export value, up 27.9 percent.
Xinhua
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