Beijing to Loosen Control over Smaller Foreign-funded Projects

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Last updated at: (Beijing Time) Friday, March 14, 2003

Beijing to Loosen Control over Smaller Foreign-funded Projects

Beijing will decentralize its control over smaller foreign-funded projects to district and county governments, according to Zhou Yinliang, spokesman for the Beijing Economic and Trade Commission.

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Beijing will decentralize its control over smaller foreign-funded projects to district and county governments, according to Zhou Yinliang, spokesman for the Beijing Economic and Trade Commission.

The governments at district- and county-level in the Chinese capital will be authorized to examine and approve contracts, constitutions and their changes for foreign-funded enterprises involving an investment of 30 million US dollars or less, as well as to issue permits for the enterprises, Zhou revealed Wednesday in Beijing.

"This is an important measure the city will take to further improve its investment environment and its service efficiency," Zhou explained.

"Starting from this month, a foreign investor may voluntarily apply with either municipal authorities or district- or county-level departments for the establishment or change of any business with investment ranging from 10 to 30 million US dollars," he said.

Only foreign investment in areas where no restrictions are imposed will be subject to the decentralization, Zhou said. Foreign-funded projects that must be approved by authorities abovethe provincial-level should continue to go through the existing approval procedures.

"The Beijing Economic and Trade Commission will supervise examination and approval by the district and county governments," Zhou said.

Over the past five years, Beijing approved the establishment ofnearly 5,000 foreign-funded projects, involving 18.95 billion US dollars in contractual foreign capital, 10.32 billion dollars of which was actually used, according to statistics.

By the end of 2002, a total of 9,172 foreign-funded enterpriseswere registered in Beijing, together with 8,028 foreign representative offices. Twenty transnational corporations have setup headquarters for their China operations in the city, and 160 Fortune 500s have invested here.

Last year, Beijing approved 1,370 foreign-funded projects and used 5.03 billion US dollars in foreign capital, including 1.79 billion dollars in direct foreign investment, up 25.3 percent and 1.4 percent respectively over the previous year, according to Beijing Vice Mayor Zhang Mao.

The foreign capital used accounted for 23 percent of Beijing's total investment in fixed assets last year, and the foreign-funded enterprises contributed to 40.8 percent of the gross output value of all industrial enterprises of scale in the city, Zhang said.

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