Allegations that China's investment environment worsens groundless
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China remains one of the most attractive destinations for investors and recent western reports saying China's limits on foreign equity ownership are the most restrictive in the world are groundless, experts and representatives of foreign companies said.
The World Bank released a report titled "Investing Across Borders 2010" on Wednesday, assessing the investment environment of 87 countries based on four groups of indicators -- investing across sectors indicators, starting a foreign business indicators, accessing industrial land indicators and arbitrating commercial disputes indicators.
China's low ranking on the four groups of indicators prompted criticism from western media that the country's investment climate was worsening.
"A country's investment environment cannot be fully reflected by the four groups of indicators. The report just represents one perspective on the issue," said Zhao Jinping, a senior researcher with the Development Research Center of the State Council, or the Cabinet.
"Other factors including logistics efficiency, labor costs and commodity prices should also be taken into consideration," he added.
The amount of foreign direct investment (FDI) into China rose 14.3 percent year on year to 38.92 billion U.S. dollars in the first five months of this year, according to data from the Ministry of Commerce (MOC).
The country drew 8.13 billion U.S. dollars in FDI in May alone, up 27.48 percent from one year earlier. That marked the 10th straight month that FDI has risen from year-earlier levels and the pace of increase also picked up.
"The data shows China's efforts to improve its investment environment have boosted investor confidence," an official with the MOC said, adding China has been working hard to remove restrictions and open more sectors to foreign equity ownership.
The Catalogue of Industries for Guiding Foreign Investment, which lists principal rules governing FDI, has been amended four times. Each time the sectors in which foreign investment is restricted were reduced and those in which FDI is encouraged, increased.
In a bid to facilitate foreign investment, the MOC scrapped 26 approval procedures for establishing a foreign firm in 2009. The government also unveiled a series of measures to help foreign firms weather the financial crisis, including extending their funding period.
Qing Zou, vice president of Asia Operation of the U.S.- funded Black & Decker (Suzhou) Precision Manufacturing Co., told Xinhua that his company was the only one in the Black & Decker Corporation that posted growth last year, largely due to the government's support.
The Chinese subsidiary expanded from a manufacturer with around 300 staff 12 years ago to a "Bigmac" with 5,000 employees working in research centers, product testing centers and production lines. Nowadays, the company undertakes 70 percent of the corporation's production task.
A survey conducted by the U.S. Chamber of Commerce showed that 79 percent of foreign firms operating in China said they would expand investment in China this year. And 51 percent of respondents said their investment in China this year would rise over 10 percent.
China will improve its investment environment, make more sectors open for FDI, reduce approval procedures and create more favorable policies for foreign firms, the MOC official said.
