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China Woos Foreign Investment to Western Areas
China will introduce a package of new policy incentives to attract more overseas funds into the country's central and western regions, a State Development Planning Commission official said Monday.
To facilitate the implementation of the country's strategy of developing the western region, more areas will be opened to foreign investment and restrictions eased, said Zhang Xiaoqiang, director in charge of foreign investment utilization under the commission.
Addressing the APEC 2000 China forum which closed in Beijing Monday, Zhang noted that China encourages foreign investors to enter sectors including transportation, power, petroleum and natural gas, urban infrastructure construction, the development of mines, and the restructuring of the machinery industry.
A detailed list has been approved by the State Council which clearly defines the "encouraged fields" for foreign investment. Foreigners investing in projects included on the list will enjoy preferential treatment when importing equipment and technology, said Zhang.
The central government will also add more funds to hasten economic development in areas in central and western China, according to Zhang. In the future, 60 percent of the country's budgeted basic construction capital and 60 percent of the loans from policy banks will be used for infrastructure construction, environmental protection, and science and education projects in these regions.
Zhang added that the central government will direct more preferential loans from international organizations, such as the World Bank and the Asian Development Bank, to the central and western regions, increasing the amount for these areas from 60 percent to 70 percent.
Zhang also pledged that more sectors will be opened to foreign investors in western China. Foreign investment in the retail sector will be extended to the capital cities of western provinces and regions in the near future, and insurance, telecommunications, and yuan banking business will also be gradually opened to foreign investors, he said.
Along with the traditional means of setting up Sino-foreign joint venture, cooperative firms, and solely foreign-funded firms, China will introduce other channels for the use of foreign funds in the western region, including Build-Operate-Transfer (BOT), project financing, stock issuing, and the setting up of industrial fund and venture capital, Zhang said.
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