China to further support foreign investment as FDI surges
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China will continue to support foreign investment, Vice Commerce Minister Ma Xiuhong pledged Wednesday as the government released figures showing a 7.7-percent year-on-year rise in foreign direct investment (FDI) in the first quarter.
"It has always been a major task for the Chinese government to provide a better environment and further facilitate trade and investment," Ma said at a press conference while discussing China's new foreign investment rules unveiled late Tuesday by the State Council, China's Cabinet.
FDI to China increased to 23.44 billion U.S. dollars in the first quarter, and a total of 5,459 overseas-funded ventures were established in the past three months, up 19.9 percent from the corresponding period last year, according to Ma.
China's FDI in March alone stood at 9.42 billion U.S.dollars, up 12.08 percent year on year, the Ministry of Commerce said in a statement on its website.
The new regulations, reflecting China's latest effort to attract more foreign investment, promised to improve business conditions while restricting funding to environmentally unsound projects.
Under the rules, foreign investment in high-tech industries, the service sector, energy-efficient and environmental protection projects is encouraged, especially in China's central and western regions.
Qualified foreign-funded companies will also be allowed to go public, issue corporate bonds or medium-term bills in China.
The new regulations also offered tax reduction on importing items for scientific and technological development by qualified foreign-funded R&D centers by the end of 2010.
The restriction for investment to industries that pollute or with over capacity was not aimed at turning foreign investors away, Ma said
"The whole adjustment is in line with the ultimate goal of China's long-term economic development," she said, noting that foreign-funded firms in China have generally done well.
"China is still the most attractive place for overseas investment," she said, citing survey results from management consultancy A.T. Kearney and the United Nations Conference on Trade and Development.
According to Zhang Xiaoqiang, vice chairman of the National Development and Reform Commission (NDRC), China's top economic planner, last year's FDI figures was proof of this.
China's FDI only dropped slightly by 2.6 percent year on year in 2009, which was in sharp contrast to the rest of the world, as the total FDI to developing countries dropped 35 percent in the same period, and the decline was even more severe for the developed nations, Zhang said.
Zhang admitted that even though the country was witnessing massive inflows of foreign capital, China's environment for foreign investment was not "perfect."
"We will keep adjusting and improving our policies," he said.
With the new regulations, the government will put more efforts into creating a more open and friendly environment for overseas firms, Ma added.
