China remains most attractive to foreign investments

14:34, April 21, 2010      

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In the 30 years since it first began market reforms, China has had great success in attracting foreign investment, said Ma Xiuhong, vice minister of the Ministry of Commerce (MOFCOM).

By the end of March 2010, foreign companies had established nearly 690,000 enterprises in China with actual investments totaling over 1 trillion U.S. dollars. China has been the largest foreign investment destination among all developing countries for 17 consecutive years.

During the international financial crisis in 2009, the Chinese government implemented a series of measures to maintain growth and made every effort to promote investment and trade. As a result, foreign investments in China dropped less than 3 percent in 2009, while direct investments by multi-national companies around the world tumbled by nearly 40 percent. Many foreign-funded enterprises in China became the major growth points and key sources of profit for the global operations of their parent companies.

According to data recently issued by the American Chamber of Commerce in China (AmCham-China), 71 percent of U.S.-funded enterprises in China generated profits in 2009, 82 percent are optimistic about the outlook for their business in China and 91 percent are confident in their China operations over the next five years.

The Foreign Direct Investment Confidence Index survey jointly conducted by A.T. Kearney and the United Nations Conference on Trade and Development (UNCTAD) on many large multi-national companies shows that China has once again become the world's most attractive foreign investment destination.

"To improve the foreign investment environment and to promote investment and trade facilitation, China has made every effort to develop its legal system," said Ma. The 18th clause of the "Constitution of the People's Republic of China" defines the legal status of foreign-funded enterprises. China has also formulated the "Law of the People's Republic of China on Chinese-Foreign Contractual Joint Ventures," "Law of the People's Republic of China on Chinese-Foreign Cooperative Enterprises" and the "Law of the People's Republic of China on Foreign-capital Enterprises."

Ma added that most areas in the manufacturing, agriculture and service industries have been opened to foreign investments. MOFCOM also issued six documents over the past year that cancel and decentralize the power of administrative approvals in 26 major categories so the local commercial departments are entitled to handle the establishment and alteration of most foreign-funded enterprises. This has significantly enhanced administrative efficiency.

"The Chinese government has attached great importance to intellectual property protection and has already achieved lots of positive results," Ma said.

The State Council promulgated the "Outline of National Intellectual Property Strategy" in 2008, taking intellectual property protection as part of the national strategy. Over the past 20 years, China has successfully established a relatively complete and sound legal system for intellectual property protection, which has helped China meet high international standards. In addition, China has established specialized intellectual property courts.

In addition to normal law enforcement, the country has implemented many special action plans against the infringement of intellectual property rights. Ma said that these plans can be divided into 10 categories and that 887 practical action plans have been carried out over the past four years. The effective implementation of these plans has played an important role in protecting the interests of rights holders.

Any product can gain accreditation under the rules on "indigenous innovation" to bid for government contracts, so long as it conforms to Chinese laws, regulations, technology policies and possesses related intellectual property rights, according to an announcement by China's Ministry of Science and Technology on its Web site.

"It is an important signal that China has acknowledged the role of fair competition in developing and strengthening its high technology, and that foreign-funded companies can also make their contributions," said Joerg Wuttke, president of the European Union Chamber of Commerce in China.

"China will further improve its operational mechanism and legal system for intellectual property protection based on previous experiences. We will do so in order to provide a better platform for investors, rights-holders, innovators and other forces which promote technological progress," Ma said.

By People's Daily Online


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