Chinese Mandarin - MOC publishes guidelines on foreign investment for 2007

BIZCHINA / Center

MOC publishes guidelines on foreign investment for 2007

(Xinhua)
Updated: 2007-03-26 10:42

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.

Related readings:
Reins on foreign investment to remain China encourages foreign
investment in hospitals
National zones to get policy support Foreign investment in China rebounds

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 69.5 billion U.S. dollars 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 937.5 billion U.S.
dollars in foreign trade, up 25.5 percent. The volume, accounting for 58
percent of the nation's total, included 509.6 billion U.S. dollars in
export value, up 27.9 percent.

(For more biz stories, please visit Industry Updates)

Learn Chinese, Chinese Mandarin