Experts: Optimizing environment for foreign investments not just delegated authority

In April 2010, China's State Council made it clear that "encouraging and permitted projects" involving a total investment of less than 300 million U.S. dollars based on the "Guidance Catalogue of Foreign Investment Industry," except projects that require approval of the State Council, should be approved by the local government authorities.

However, experts believe that optimizing the investment environment is more than just the delegation of authority.

Administrative inefficiency has always plagued many foreign investors in China. For example, an officer of a company once had to repeatedly rush between the approval department in Beijing and his company if the investment was large and the company was not located in Beijing. Therefore, receiving approval became a time-consuming, laborious and costly issue. However, the new rules of the "20 Views of the State Council" have made it possible for most foreign enterprises to complete relevant procedures at local approval departments.

The Ministry of Commerce canceled and delegated 26 categories of examination and approval in 2009. There were 23,400 newly-established foreign enterprises in China in 2009, and only 56 of those needed to be approved by the Ministry of Commerce, only accounting for 0.2 percent.

Simplifying examination and approval, lowering the threshold and creating efficient channels are all steps welcomed by foreign-funded companies.

"Incredibly, It only takes 45 minutes for a company to obtain approval from the National Development and Reform Commission to receive business licenses," said Wei Qiyan, general manager of the Programme Contracts Division of the Taishan Nuclear Power Joint Venture.

So far, the State Administration for Industry and Commerce has granted 356 local industry and commerce administrations the right to approve foreign enterprise registration applications. In central and western China, 42 municipal and local industry and commerce administrations were granted the right to approve foreign enterprises registration applications, bringing more convenience for foreign enterprises to invest in central and western China.

The State Council urged the diversification of foreign investment modes, proposing that the industry and commerce administrations should further formulate rules to support foreign investors' entry into the new-energy, new material, new medicine and other strategic emerging industries through share investment, share pledges and the capital gained as a result of developing advanced technologies with firm protection of intellectual property rights.

Experts pointed out that China currently remains the most important transfer destination in the world's industrial chain, and the future transfer centers will be the premium manufacturing industry, regional R&D centers and the modern service industry. China's optimization of foreigners' investment environment is not just limited to relaxing the approval rights but also improving the soft environment in terms of system, mechanisms, concept and policy.

Efforts will be further strengthened to make reforms and for innovation so as to build a more open and better investment environment and help transform the economic development mode through foreign investment service.

By People's Daily Online