China is setting the stage for more foreign investors to enter
western and central China.
The country hopes to see funds from abroad go into a number of
newly expanded sectors, some of which used to be off limits to
foreign investment. Mineral exploration, agricultural development
and the service industry are government investment priorities.
Such measures are included in an updated directory for foreign
investors looking to enter western and central China. The
directory, issued by the National Development and Reform Commission
(NDRC) and the Ministry of Commerce, will go into effect on
September 1.
Investors will soon be able to access the directory, which
includes 267 government-promoted investment areas, at the
commission's official website, www.ndrc.gov.cn.
An NDRC official surnamed Fu said the move is part of China's
effort to develop its western and central regions.
"We have allowed overseas investors more market entry
opportunities this time," said Fu. Market opening is also in line
with China's commitment to the World Trade Organization, he
noted.
Other than government budgets, the main source of development
financing is equity provided by companies and individual
entrepreneurs, as well as loans channeled through the financial
system.
Foreign investors that engage in energy, transportation and city
infrastructure construction, including coal, oil, natural gas,
electricity, transportation, waste water treatment and waste
disposal -- all of which entail large input and slow returns -- may
be allowed to expand their scope of business.
"We even allow them to set up travel agencies and develop scenic
areas," said Fu. "The rapid opening of western and central China is
aimed at facilitating foreign capital inflow."
Investors in "encouraged" industries will enjoy advantageous
treatment in taxation and land use in accordance with Chinese laws
and regulations.
Aiming to reduce the huge disparity between west and east, China
launched its "Go West" campaign with great fanfare in 1999. But the
regional development gap, instead of shrinking, is widening.
Per capita GDP rose from US$498 in 1998 to US$663 in 2002 in the
western region. But the eastern region witnessed a jump of 41
percent, from US$1,212 to US$1,704 during the same period.
Zhong Dingxu, general manager of Sichuan's Deyue High-tech Seed
Company, says the government's sustained effort to support
agriculture in the region is encouraging.
"The new directory places more emphasis on grain seed
cultivation and food processing and I think more foreign investors
will become my partners," said Zhong. His company has invested
substantially in hybrid rice research and exports at least 1,500
tons of rice seed to Vietnam and Myanmar annually.
Tong Xiaoping, vice mayor of Chongqing Municipality, vowed to
turn the city into a magnet for foreign money by improving the
investment climate. She encouraged both overseas investors and
enterprises from China's developed coastal areas to invest in
Chongqing.
At a press conference held Tuesday in Beijing, Tong said that
China's top 500 companies will participate in a forum organized by
the Chongqing government and the China Federation of Enterprises on
September 5 and 6.
"That is a chance for us to show our investment environment,"
said Tong. She said Chongqing is expected to become an auto and
auto parts production base and high-tech center in western
China.
In addition to the overseas investment, the government will
increase its investment in and long-term funding of agriculture,
environmental protection, social security, technology, education
and culture and relics protection in the west, said Tong.
(China Daily July 28, 2004)