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China Changes Strategy to Absorb More Foreign Funds: Expert
China is trying to absorb more foreign capital by encouraging foreign businesses to set their sights on its service industry.
Ma Yu, a researcher on China's foreign trade with the China Foreign Trade Academy, told Xinhua that China is in the midst of a dramatic shift in its use of foreign investment, adding that agriculture will become a promising target for foreign funding.
The agricultural industry currently receives only two percent of the foreign capital flowing into China.
Ma believed that a further open agro-market and appropriate policies will make agriculture a key sector for foreign investors. He said that as China's entry into the World Trade Organization (WTO) approaches, the country must make a strategic change in the focus of foreign businesses and ways of attracting foreign capital.
He suggested that the government should encourage international corporations to purchase or merge Chinese enterprises by initiating a series of reform, such as establishing stock and property rights trading markets, mapping out new laws and regulations, and redistributing the State assets.
Statistics show that the contractual foreign capital approved by the Chinese government in 1999 sank by 20.9 percent to some 41. 2 billion U.S. dollars. The foreign capital actually flowing into China dropped by 11.37 percent to 40.398 billion U.S. dollars in the same year.
Ma said that China will see more foreign capital when it diversifies modes of absorbing foreign funds.
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