Minister on Use of Foreign Capital in 2002

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Last updated at: (Beijing Time) Friday, December 28, 2001

Minister on Use of Foreign Capital in 2002

China will continue to improve the work in using foreign capital next year, with high-tech and infrastructure sectors listed on top of the agenda for attracting overseas investors, trade minister Shi Guangsheng said Thursday in Beijing. Besides, China will actively implement the "Go Out" strategy next year, a measure to spur Chinese enterprises to invest in or contract projects overseas, Shi said.

Industries

At an annual work conference on foreign trade, he said the key areas designated by the Chinese government in absorbing overseas funds include information technology, bio-engineering, new materials, aerospace, petrochemical, chemical and construction materials industries, and port, harbor and road construction.

--Regions

China will encourage multinational corporations to set up regional headquarters in Beijing, Shanghai and Guangzhou, and establish their research and development centers in the country.

China will also promote the use of foreign capital in agricultural projects, small and medium-sized enterprises, and the renovation of state-owned enterprises, as well as for the development of the western region of the country.

'Go Out' Strategy

Overseas-funded enterprises in the country are encouraged to increase export, said the minister of foreign trade and economic cooperation.

Next year, Shi said, China will actively implement the "Go Out" strategy, a measure to spur Chinese enterprises to invest in or contract projects overseas.

Foreign Products

Efforts will be made to promote joint development of foreign oil, gas mineral, forest and fishery resources, Shi said.

The Chinese government encourages competent enterprises to invest in or run businesses in Commonwealth of Independent States, Africa, central Asia, Middle East, East Europe and South America, the minister said.

Changes Predicted of Foreign Investment After China's WTO Entry

After China's WTO entry three changes are predicted of foreign capital flowing into China in investment. Global investment will continue to grow in coming five years, large amounts of transnational capital flowing in will provide favorable condition for China in attracting foreign funds.

In contrast, China's market system is not mature enough, relevant laws and regulations are not complete either, 70 percent of foreign investment flowing in are absorbed by way of joint ventures or cooperation, and few are adopted by global merger, which has hindered the roll-in of foreign investment. In view of this, during a short period of time, foreign investment in China will continue to increase but will not have a too large amount as it should be.

Commodity exports may become another choice for foreign investors. Part of foreign-funded companies in China may adjust their business tactics from direct investment to commodity exports.

China would gradually open up its Telecom, finance, insurance and its new technology sectors after WTO entry, which would suck up more foreign funds.

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