Enterprises Encouraged to Develop Overseas Processing Trade

China will actively help enterprises do overseas processing trade well and encourage them to take a direct part in international competition, announced Zhang Zhigang, vice-minister of the State Economic and Trade Commission, at a symposium held in Qingdao June 14.

Judged from per-capita share of foreign exchange, China still lacks the conditions for making large-scale spot-exchange investment, and developing overseas processing trade is an important way for implementing the opening strategy, said Zhang. By the end of 1999, there had been approximately 6,000 Chinese overseas enterprises with the exception of financial institutions, involving contracted funds valued at US$6.95 billion. Since the mid-1990s, processing trade has become the main form of China's overseas investment.

To do processing trade well, enterprises should be taken as the mainstay and investment in kind as the major form, with the developing countries as key investing areas, Zhang added. Then he put forward five requirements for further promoting the healthy development of overseas processing trade. First, removing obstacles to Chinese enterprises' direct entry into the international market and reducing unnecessary government interference in enterprises. Second, conducting standard management of overseas investment, and drawing up plans to avoid rushing headlong into mass actions, blind investment and duplicated construction. Third, pushing for government support in the fields of debt-to-equity transfer, priority stock-listing, re-employment of redundant personnel, and technological innovation and upgrading. Fourth, getting governments to provide enterprises with necessary legal consultation and market information, helping them get a better understanding of international market demand and the investment environment. Fifth, strengthening supervision and controll, reducing examination and approval links, enforcing strict examination and approval conditions to guarantee project quality and economic returns.



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