China strives to build open, optimal investment environment for foreign firms: vice president

Chinese Vice President Xi Jinping said Tuesday China is taking vigorous steps to create a more open and optimal investment environment for foreign-invested enterprises.

Chinese Vice President Xi Jinping delivers a keynote speech during the opening ceremony and world leaders investment summit of the 2nd World Investment Forum, which is sponsored by the United Nations Conference on Trade and Development (UNCTAD), in the coastal city of Xiamen, southeast China's Fujian Province, Sept. 7, 2010. (Xinhua/Lan Hongguang)
Xi made the remarks while attending the opening ceremony of the 2nd World Investment Forum (WIF) in Xiamen City in southeast China's Fujian Province.

With the theme "Investment for Sustainable Development," the three-day forum, which was organized biennially by the United Nations Conference on Trade and Development (UNCTAD), will discuss the challenges and opportunities for global investment in a post-crisis economy.

Xi said foreign investment is beneficial for both China and foreign firms. China receives funds, advanced technology, managerial expertise and talent that support China's modernization while the foreign-invested enterprises generate profits.

Obtaining "financial resources" and "intellectual resources" through foreign investment has been an important part of China's opening-up policy for the past 30 years and more, he added.

"Today in China, 22 percent of tax revenues, 28 percent of added industrial value, 55 percent of foreign trade, 50 percent of technology import and 45 million jobs come from foreign-invested enterprises," he noted.

"Many foreign-invested enterprises in China have become the growth engine and profit center for their parent companies' global business," he said.

As of July this year, some 698,000 foreign-invested enterprises with a paid-in capital of 1.05 trillion dollars had been established in China, Xi said.

Recently though some foreign businesses have complained about the "worsening" investment environment.

Last Thursday the European Chamber of Commerce released a report airing a host of such complaints from its member companies, especially about market access and the regulatory environment.

Shen Danyang, deputy director of the Ministry of Commerce's General Office, responded Sunday that the complaints "highlighted foreign businesses are attaching more importance to the Chinese market."

Chinese Premier Wen Jiabao said in July that it was not true to claim that China's investment environment was worsening as "foreign investment will not pour into a country where the investment environment is worsening."

While global FDI slumped by almost 40 percent last year, China's FDI was down by a mere 2.6 percent, according to the UNCTAD. China remained the second largest recipient nation of FDI, following the United States.

Foreign direct investment (FDI) this year is set to "surpass 100 billion U.S. dollars," compared to 90 billion dollars last year, Shen said on Sunday.

During the first seven months, China's FDI increased 20.65 percent year on year to 58.35 billion dollars, according to the latest MOC statistics.

Meanwhile, some 14,459 foreign-invested companies were established in China in the first seven months, up 17.9 percent year on year.

"The latest UNCTAD survey shows China is still the most appealing destination for investment in the world," Xi said.

"As China's open economy continues to develop, foreign investment in China will surely enjoy an even broader space and generate even higher profits," he added.

However, to further boost foreign investment, China will continue to foster an open and transparent legal system, Xi said Tuesday.

He said China has been working over the past 30 years to expand market access for foreign-invested businesses.

China has optimized foreign investment structures four times through amendments to the "Catalogue for the Guidance of Foreign Investment Industries," he added.

In April, the State Council, China's cabinet, introduced a series of innovative measures to optimize foreign investment structures.

The measures included encouraging more foreign investment in high-end manufacturing industries, high-tech industries, modern services industries, new energy, and energy-saving and environmental protection industries.

Meanwhile, foreign firms have been encouraged to move their operations to the relatively poor central and western regions of China.

Xi promised China would continue to build a market environment so Chinese and foreign-invested firms can compete fairly.

"The Chinese government is approaching negotiations to join the 'WTO Government Procurement Agreement' with a responsible attitude," he said.

He said China will make government-funded procurement and construction projects open and transparent to both Chinese- and foreign-invested enterprises.

According to Xi, foreign-invested enterprises won 55.4 percent of all bids in the international tendering for 12,000 procurement programs of mechanical and electric products in 2009.

Meanwhile, "Intellectual property rights (IPR) protection is high on the agenda of the Chinese government," he said, which was an issue of major concern for foreign companies.

China will improve systems, mechanisms, laws and regulations designed for IPR protection to offer more effective and efficient protection to investors and IPR owners.

Xi said the country welcomes continued cooperation and supervision by foreign-invested enterprises on China's actions and progress in regulating IPR infringement.

The WIF is a global forum that aims to strengthen international cooperation to promote international investment and economic growth.

The first WIF was held in Accra, Ghana, in April 2008.

Source:Xinhua