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Chinese vice premier pledges "active" use of foreign investment through crisis
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09:32, February 22, 2009

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Vice Premier Wang Qishan has encouraged foreign investors to have faith in China's development, saying the country would "actively" use overseas investment.

Wang made the remarks during his two-day tour on Friday and Saturday in south China's Guangdong Province, a frontier of the country's export-oriented sector.

"The 1.3-billion-populated country is accelerating its pace in industrialization and urbanization, and there is a great potential in the domestic market, which should be the source of our faith (in withstanding the financial crisis)," Wang told a gathering of senior executives from multinationals and foreign commerce associations.

He said that China would continue to create an environment for fair competition and improve transparency of its legal system, while at the same time stabilizing foreseeable government policies.

"A more open China is bound to offer increasing opportunities for foreign-funded firms inside the country," he said.

He also said the world needs to fight against any form of protectionism at the moment and join hands in promoting the global economic stability and development.

Wang's comment came after the country reported this week a more-than-30-percent plunge in the actual use of foreign investment in January, the fourth month in a row to see foreign investment decline year on year.

Economists expected falls in foreign investment use after the country adjusted its foreign investment policies to upgrade the export sector, into which half of the country's foreign investment flowed.

The unexpected world economic turmoil, however, added to the downturn, as foreign investors chose to withhold their money because of the spreading global financial crisis.

After-shocks of the crisis have forced some foreign firms to postpone or cancel projects in China, while others have experienced financial difficulties or received less overseas orders.

Yet, some multinationals who met with the Vice Premier also offered upbeat news.

Brice Koch, president of ABB North Asia said the Zurich-based company plans to increase investment in China and recruit and train more people, adding that the global crisis could offer new opportunities to the country boasting lower costs.

Yang Deming, president of Best Buy Asia-Pacific, said the retailer added five new stores in China last year, and has no plan to reduce its China investment in the future.

China could still be very attractive to overseas investment for its potential in further growth as fundamentals of the economy remained unchanged, Long Guoqiang, a researcher with the Development Research Center of the State Council, told Xinhua.

Commerce Minister Chen Deming, who is in charge of management over foreign-funded enterprises, said the ministry would like to help multinationals find more opportunities in China and weather through the crisis together.

The vice premier also pledged support to the country's trade and financial sectors during his stay in Guangdong.

"Though the global financial crisis created difficulties to China's exports, the overall trend of the deepening economic globalization and the transfer of global division of labor remain unchanged," Wang told local government departments and heads of local firms and commerce chambers.

"China's economic development still embraces an important strategic opportunity," he added.

Wang said the government would "go all out" to achieve stable growth in foreign trade. He also urged export firms to face the challenges of slackening overseas demand, find all possible ways to expand their share of the global market, and improve their global competitiveness.

He said the government would also increase support for the country's economic development from the financial sector.

He asked the country's financial institutions to try hard to meet justified capital demand according to government policies, and urged a good interaction between the economy and the financial sector through strict risk prevention efforts.

Source: Xinhua

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