Foreign investment to be encouraged in 400-plus sectors in China's mid-west

China issued on Dec. 23 a new category of industries where foreign investment is encouraged in the 21 provinces in the mid-west and northeast of the country. The new list which includes more items than the existing one will be effective as of Jan 1, 2009.

The existing list promulgated in 2004 and the list of priority industries for foreign investment in Liaoning Province issued in 2006 are annulled. The new list expands the number of items to more than 400 from 267 in the 2004 list.

Foreign investment projects under the category enjoy preferential treatment which is granted to foreign investment projects under the "encouraged" category defined by the guidance of foreign investment orientation which is issued by the State Council.

Foreign investment projects underway are also subject to the policy related to this category if they are proved to be up to the standards of the new category.

Foreign investment flow into China is expected to surpass 90 billion for the whole year of 2008, making China the top destination of foreign investment among developing countries for 17 years in a row, according to a meeting of the Ministry of Commerce on Dec. 23.

The figures released by the Ministry of Commerce earlier this month show that the actual use of FDI into China increased by 26.3 percent to 86.4 billion USD over the first eleven months of the year, nearly doubled the less than 14 percent rise in the same period of last year but much lower than the 45.6 percent surge in the first six months of this year.

The use of FDI drops in November 2008 by 36.5 percent to 5.32 billion USD, compared with an increase of 35 percent in the same month of 2007.

A business confidence survey by the European Union Chamber of Commerce in China shows that most European companies recognize less developed areas in China's mid-west will be the driving force of the whole economy.

Source:  People's Daily Online