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IT Sector Top Choice for Overseas Capital
The information technology sector, including telecommunications, e-commerce and software, will become Shanghai's top destination for foreign capital over the next three years, said a senior investment official.
Liu Jinping, vice-chairman of Shanghai Foreign Investment Commission, said overseas investors are expected to target the most coveted business like telecom and Internet. Foreign involvement in these sectors is currently regulated and limited and Liu refused to disclose a timetable for their opening.
But he warned a weak law and regulatory framework could make overseas investors tentative about doing business in China.
"Overseas investors are less enthusiastic about traditional sectors so the opening of the much-coveted telecom and Internet sectors could bring more capital inflow," said Liu.
Rumours that China will open its telecom and Internet sectors to foreign competition have abounded as World Trade Organization entry draws near.
Some domestic newspapers have carried reports saying that the opening could begin as early as July or at the end of the year. Ministry of Information Industry sources have not revealed a timetable.
In the deal reached with the US last November, China agreed to allow up to 50 per cent foreign share in value-added telecom services like telecom operator, Internet service provider and long-distant phone service.
However, Liu said China should draft laws and regulations on foreign involvement in these sectors.
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