China vows better environment for foreign investment

XIAMEN, China Sat Sep 8, 2012 7:04am EDT

Related Topics

XIAMEN, China (Reuters) - China will work to provide a better policy environment to attract foreign investment, a senior government official said on Saturday, underlining efforts to turn around a slower investment inflow during a global economic downturn.

Ma Kai, a state councillor, also said China would improve the regulatory system governing mergers and acquisitions by foreign companies as well as the mechanism for anti-monopoly assessment of foreign investment.

"We will try to further improve the government efficiency, continue to secure the legitimate rights of foreign investors and implement stricter regulation relating to intellectual property right protection," Ma told a trade and investment forum in Xiamen city.

Foreign direct investment in China has eased over past months, reflecting waning appetite among investors because of the global downturn and a more cautious outlook on the world's second largest economy, which has slowed for the sixth straight quarter in the three months to the end of June.

China drew $66.7 billion in foreign direct investment from January to July, down 3.6 percent from the same period the previous year, largely because of falling capital inflows from debt-ridden European countries.

A European business lobby said on Thursday a failure to make much needed market access reforms could put at risk sustained growth of China's state-led economy.

The European Union Chamber of Commerce in China said that without addressing "massive asymmetry" in market conditions for foreign and domestic companies, the government could have a hard time overcoming ills such as diminishing cheap labour and the global crisis.

Ma also said the government would step up efforts to boost domestic demand, which would likely provide more investment opportunities for foreign companies.

Gao Hucheng, a vice commerce minister, echoed Ma's comments, saying China would strengthen its policy support and would particularly encourage foreign companies to investment more in the high-tech, green energy and modern service sectors.

"We will try to attract more investment in the central and western area of China and encourage multinational companies to make investment in high-tech and modern service industries," Gao said at the same forum in Xiamen.

China drew a record $116 billion in foreign direct investment last year. The Commerce Ministry aims to attract an average of $120 billion in each of the next four years. It is roughly on course to hit the target in 2012.

China's economy expanded at its slowest pace in more than three years in the second quarter, growing 7.6 percent from a year ago as demand at home and abroad slackened, confirming a downtrend that leaves full-year growth on course for its softest showing since 1999.

(Reporting by Aileen Wang; Editing by Robert Birsel)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

How to get out of debt

Financial adviser Eric Brotman offers strategies for cutting debt from student loans and elder care -- and how to avoid money woes in the first place.  Video