Overseas investors are to be allowed wider Chinese business access when a new government investment directory goes into effect at the beginning of the year.

Experts said the document, presented by the National Develop-ment and Reform Commission and the Ministry of Commerce, is in line with the country's World Trade Organization (WTO) commitments.

The detailed directory consists of various sectors the central government is presently encouraging or discouraging.

A commission spokesman said the update is aimed at attaining such goals as allowing China to obtain more sophisticated technologies.

For example, the government is encouraging foreign investors to channel capital and research into such sectors as equipment production used in improving the environment and manufacturing electronic devices of vehicles.

Meanwhile, the government is speeding up the opening-up of the service industry. It is the first time for overseas investors to have a presence in sectors such as film and TV production.

As the most populous developing country, China enjoys decisive comparative advantages in labour-intensive industries, which were encouraged by the government in the newly updated directory.

The directory, which was updated based on the old one made public after China entered into the WTO in 2001, can be reached at the commission's website www.ndrc.gov.cn.

Lin Yueqin, a researcher with Chinese Academy of Social Sciences, said yesterday that the directory has already given foreign investors nearly as many choices as domestic investors.

"But I should say, local govern-ments should pay more attention to the quality of foreign projects," said Lin, adding that related governmental decision-makers should have a clear idea as to whether projects are really necessary for locals.

China's opening-up, especially its WTO entry, has helped overseas investment flow into the country. Since 2002, China has absorbed actual foreign direct investment (FDI) worth more than US$50 billion a year. Statistics indicate that the amount of FDI China attracted in the first 10 months of this year reached US$53.78 billion, already exceeding that for the whole of 2003.

Eying the country's huge manufacturing prowess, foreign investors have also rushed in to share in the expanding Chinese market, said Lin.

But he blamed some local governments for paying less attention to the social and environmental impact overseas projects bring.

Zhang Jianyu, visiting scholar with Tsinghua University, told China Daily yesterday that the directory cannot play a decisive role in attracting foreign investment.

"As China's market increasingly becomes market-oriented, the market will have final say for foreign investment," said Zhang.

Source: China Daily