¡¶International Investment Express¡·
projects, high technology can reduce costs,
China needs to attract more high-quality foreign
direct investment (FDI) to further upgrade its
"FDI will continue to play a leading role
in bringing new technology to many fields such
as manufacturing and telecommunications,'' said
Hu Jingyan, director of the Foreign Investment
Department of the Ministry of Foreign Trade
and Economic Co-operation (MOFTEC).
He was speaking at the "Attracting High-Quality
FDI Forum'' yesterday at the ongoing Sixth China
International Fair for Trade and Investment
"However, the new challenge is attracting
higher quality FDI,'' Hu said.
FDI projects in China still tend to be short-term,
low technology and labour-intensive.
MOFTEC figures revealed that China had attracted
US$424.77 billion in actual utilized foreign
investment by the end of July.
Foreign-invested enterprises accounted for 50.8
per cent of two-way merchandise trade last year.
They also provided employment to 6.4 million
people directly last year, and to millions more
indirectly in such sectors as distribution.
To maximize the benefits and minimize the costs
of FDI, China needs largely to attract more
longer-term projects embodying high-technology,
capital-intensive methods of production and
to expand from FDI in manufacturing to FDI in
service industries, he urged.
China's accession to the World Trade Organization
(WTO) has created an excellent opportunity to
help upgrade its FDI quality, according to Kenneth
Davies, principal administrator and senior economist
of the Directorate for Financial, Fiscal and
Enterprise Affairs at the Organization for Economic
and Co-operation Development (OECD).
Many incentives currently offered by the Chinese
Government are very attractive to high-quality
FDI, such as rectification of its legal system
and standardization of the market order, he
In addition to the removal of trade-related
investment measures (TRIMs), such as the foreign-exchange
balancing requirement, China is opening its
services sectors wider, including the financial
As a result, existing foreign-invested enterprises
will be able to do many things they were formerly
not permitted to do, such as distribute their
products in China and engage directly in foreign
These changes will also provide an opportunity
for OECD members to play a bigger role in making
direct investment in China, said Davies.
"Another category of FDI attraction is
that of rules-based incentives, which are less
easy to define and more difficult to implement
than fiscal and convenience-based incentives,''
This includes the legal environment in which
FDI operates. China has, in a remarkably short
period of time, established a wide-ranging body
of FDI-related legislations and is striving
to develop an impartial and effective court
"But, for institutional and manpower reasons,
this work will take years, rather than months,
to achieve its objective,'' Davies said.
Effective implementation of legal matters is
vital because domestic and foreign investors
need to have guaranteed property rights, including
intellectual property rights.
Many flagrant IPR violations that are reported
continue unchecked year after year and these
do not encourage multinational corporations
to bring their most advanced technology to China.
Stronger implementation of China's IPR protection
legislation and its international commitments
in this regard is needed, not just to attract
FDI but also to stimulate domestic creativity.
China has this year made further progress in
increasing the transparency of its trade and
investment regime in line with its WTO commitments.
Investors appreciate transparency and stable
and predictable FDI policies that do not change
suddenly with the announcement of a new law.
They do not appreciate any set of regulations
that has not been publicly discussed and which
had no opportunity to influence during its preparation.
It is important to recognize the improvements
that have been made in this regard in recent
years, Davies said.
welcomes Chinese investors
The Netherlands is eager to strengthen economic and
trade co-operation with China by introducing more
Chinese investors to its markets.
"We warmly welcome far-sighted Chinese entrepreneurs
to invest in the Netherlands, while Dutch investors
will maintain their investment enthusiasm in China,''
said Pieter Gooren, a senior official with the Consulate
General of the Netherlands in Guangzhou.
Gooren made the remarks yesterday at a seminar themed
"the Netherlands, Your Knowledge Partner'' during
the Sixth China International Fair for Investment
Now that China has become a member of the World Trade
Organization (WTO), the time is right for Chinese
entrepreneurs to pay more attention to the global
market, said Gooren.
"And the Netherlands is an ideal investment destination,''
said Paul H. M. Scheffer, vice-chairman of the West-Holland
Foreign Investment Agency.
He added the Netherlands is always open to those investors
with new ideas, projects and plans.
Geographically speaking, the Netherlands is a gateway
to other European countries, offering numerous business
opportunities to investors, Scheffer noted.
"Moreover, the Netherlands has perfect infrastructure
construction in terms of transportation, telecommunications
and other aspects, and a sound legal framework to
protect the rights of foreign investors,'' said Scheffer.
Dutch investors also expressed their desire to establish
themselves more in the Chinese market.
"Dutch companies are happy to co-operate with
Chinese counterparts in all areas of the agricultural
sector, based on the principles of mutual benefit,''
said Herbert A. van Sluys, an official at the Association
of Enterprises in the Mechanical, Metalworking, Plastics,
Electronic and Electrical Engineering Industries and
Both China and the Netherlands are large countries
producing agricultural products.
But in terms of development and efficiency, China
lags far behind the Netherlands.
"The advanced technology of the Netherlands is
expected to play a vital role in the invigoration
of its food industry in China,'' Sluys noted.
The Netherlands, a prominent player in the world in
the food processing industry and expertise in agricultural
research, has a long history of co-operation with
In recent years, Sino-Dutch co-operation has developed
The Netherlands is China's third biggest trade partner
among European Union countries.
Bilateral trade and economic co-operation have rocketed
in recent years, figures from the Ministry of Foreign
Trade and Economic Co-operation revealed.