Foreign Businesses Encouraged to Invest in W. China

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Last updated at: (Beijing Time) Friday, December 21, 2001

Foreign Businesses Encouraged to Invest in W. China

The Chinese government on December 20 published a series of specific measures for attracting foreign businessmen to invest in the development of the western region, providing overseas personages with unprecedented, preferential policies, who invest in the service trade and other fields.

The "Opinions on the Implementation of Some Policy Measures for the Large-scale Development of the Western Region", drafted by the State Council Western Region Development Office, has recently been transmitted to local governments at various levels in the western region. More than 20 of the 70 provisions of this document are related to foreign investment and foreign trade and cooperation. Measures contained in the document have been put into effect at the beginning of 2001.

With regard to extending the opening of the service trade in the western region to the outside world, the experiment on foreign investment in banking, commercial and retail enterprises will be extended to central cities (municipalities, provincial capital cities and capital cities in autonomous regions) in the western region, the experiment on Sino-foreign joint external-trade companies will be extended to central cities in the western region, the qualifications and conditions for both Chinese and foreign sides are appropriately relaxed compared to the eastern region.

The document stipulates that after China's entry into the World Trade Organization (WTO), within the framework of laws and related agreements, priority consideration will be given to the demand of foreign banks in the western region for handling Renminbi (People's Currency) business. Priority permission is given to applications by foreign insurance companies for the establishment of business institutions in the western region, priority consideration is given to the demand of foreign business people for setting up insurance agent companies and joint insurance brokerage companies in the western region.

With regard to the establishment of Sino-foreign cooperative travel services in the western region, the standard for the examination of creditability and the examination and approval of projects will be appropriately lowered.

In line with China's commitments made during negotiation on its WTO membership and relevant stipulations, foreign accounting companies (offices) are allowed to set up Sino-foreign cooperative accountants' offices in the western region, those who temporarily lack the required conditions for the establishment are allowed to set up membership offices in the western region. Existing Sino-foreign cooperative accountants' offices are encouraged to set up branches in the western region. When conditions are ripe, they can first set up Sino-foreign cooperative lawyers' offices in the western region.

The document stipulates that the setting up of Sino-foreign joint ventures and cooperative enterprises related to construction and design service is allowed, in which foreign businessmen are allowed to hold shares. Foreign-funded enterprises set up in the service fields related to construction, design, engineering and city planning will be allowed gradually. Foreign businessmen will be gradually allowed to hold shares in Sino-foreign joint railway freight enterprises and Sino-foreign joint highway freight enterprises. Foreign-funded enterprises are set up in railway freight and highway freight fields.

In addition, specific stipulations on policies and regulations, examination and approval procedures, service efficiency, and tax reduction or exemption concerning foreign investment are also laid down in the document.

Based on the "Industrial Catalog Guiding Foreign Investment" and "the Superior Industrial Catalog of Foreign Investment in Central and Western Regions" already published by the Chinese Government, the document stipulates that with regard to infrastructure facilities and superior industrial projects invested by foreign business people in the western region, restriction on the percentage of share to be held by foreign investment is appropriately relaxed in light of different trades. With regard to infrastructure facilities and superior industrial projects invested by foreign businessmen in the western region, restrictions on the proportion of Renminbi loans for fixed asset investment provided by domestic banks is appropriately relaxed. Some projects built with preferential foreign loans in the western region, the proportion of the use of preferential foreign loans in the total project investment is allowed to the raised appropriately.

In order to attract talents, the document stipulates that entry and exit conveniences shall be provided for foreign scientific and technological personnel, high-level managerial personnel and investors in the western region. Talents in other regions are supported to participate in the development of the western region in a variety of forms, such as providing part-time and short-term services, undertaking commission projects, doing cooperative research, using technology as a means of shares and engaging in contractual operation. Domestic senior experts, outstanding post- doctors and overseas students are organized by stages and in groups to go to the western region for conducting investigation and providing consulting service and developing distance service by applying modern communication means and network technology. Places in the western region where conditions permit are supported to set up parks for returned Chinese students to start up enterprises.

At the same time, China will reform the registered residence management system.

By People's Daily Online

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