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Preferential Policies for Foreign Investment Not to Be Abolished
As China is ready to join the WTO, will it abolish preferential policies for foreign investment after its WTO entry? No, said an official with the Foreign Capital Department under the Ministry of Foreign Trade and Economic Cooperation (MOFTEC).
The official said that giving national treatment to foreign investors means that the treatment given by the government of the host country to foreign investors should not be lower than that granted to domestic investors under the same circumstance. But this doesn't imply that a country can't give preferential treatment to foreign investors in some aspects according to law in light of actual needs.
He said that in a country with an imperfect investment environment, granting foreign investors certain preferential polices is a necessary measure to make up deficiency in the investment environment. In this sense, for a developing country to implement a preferential policy to encourage investment is exactly beneficial to fair competition with developed countries in the field of international investment.
He also said that in fact, many developing countries, even some developed countries, all adopt certain preferential polices for foreign investment. The official said that in absorbing foreign investment, China, as a developing country, should, on the one hand, actively widen the opening of its fields and markets and improve the investment environment; on the other hand, it should give guidance of preferential policies, especially preferential policies for the industry and remote border areas encouraged by the State and urgently needing to be developed. For this reason, he explained that after its WTO entry, China would continue to offer preferential policies to foreign investment in a certain period of time. But, he said, from the long-term perspective, the domestic and foreign enterprises would gradually get the same treatment along with the perfection of the socialist market economic structure and improvement in the investment environment.
On the issue of opening of the money market, the official said that the Chinese government will deal with the matter with great care. He added that the opening of the capital market should be predicated on the strengthening of the financial system and improvement of the supervision ability of the central bank, and should fit in with the entire economic restructuring. He continued that in regard to developing the overseas financial markets, the Chinese government will continue to choose State-owned enterprises to list in Hong Kong which function as an international financing window and at the same time open up securities markets in other countries.
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