Beijing vows to create a first- class investment environment to attract more overseas funding, the city's mayor has said.

Liu Qi made the remarks Tuesday at a conference on improving the city's investment climate, saying the task will face two challenges once China enters the World Trade Organization (WTO).

First, the emphasis will be shifted from tax reductions to establishing a fair and normal market environment. Second, preferential policies will be switched to general favorable ones, he said.

Meanwhile, the polices of attracting capital will become more transparent and consistent.

The mayor listed four areas of focus for attracting investment: setting sound policy, maintaining a steady market, improving all- round service and building a better hard-ware or infrastructure environment.

He explained that sound policy requires a complete set of regulations which can protect the interests of both China and overseas investors; a steady market needs to set channels for overseas capital in compliance with international norms; and a better hard-ware environment is to speed up the construction of high-tech infrastructure for information industry and other sectors and to rebuild Zhongguancun, China's "Silicon Valley", in particular.