China works out new program on using foreign funds
Source: People's Daily Date: 2006-08-04
During the 11th Five-Year Plan period (2006-2010), China will continue to actively and effectively utilize foreign funds, while taking the initiative to resist and eliminate risks to national security.
This is stated in the country's program on using foreign funds in the period, which was just formulated and issued by the National Development and Reform Commission.
The program promotes a transformation from paying attention to "quantity" to paying attention to "quality" in utilizing foreign funds during the period. Emphasis will be placed on importing advanced technologies and experienced and high-quality managing intellectuals instead of making up for the shortage of capital and foreign exchanges.
More attention should be paid to construction of ecological balance, environment protection, saving and comprehensively utilizing natural and energy resources, thus integrating utilization of foreign funds with updating of domestic industrial structure and raising of the technological level.
Efforts will be focused on direct foreign investment. It is necessary to encourage foreign funds to take part in reorganization or transformation of domestic enterprises in such forms as merging, share-purchasing or re-investment. Except where related to national security, restrictions on foreign holding companies will be gradually lifted.
Meanwhile it is necessary to step up the pace of formulating and promulgating the Anti-Monopoly Law; give further details on the policies toward those sensitive industries or major enterprises which are related to the national safety, the national economy and people's livelihood; improve the industry-access system for foreign funds; strengthen examination and supervision of the merging cases which are related to the above-mentioned sensitive industries or major enterprises and involved in foreign funds so as to secure the state's control over the development of those strategic industries and major enterprises; and revise and publish the Law on Enterprises' Income Taxation that applies to both domestic and foreign funded enterprises.
Efforts will be made to optimize and upgrade the foreign-funded industrial structure, encourage foreign investors to make contributions to the development of China's modern agriculture with emphasis on development of ecological agriculture and high-tech and high value-adding farming such as planting, breeding, comprehensive utilization of agricultural waste, tapping of biological energy, developing and manufacturing of modern farm machinery and equipment, deep processing of farm produce, and importing of modern farming technologies and managing systems.
Foreign businessmen will continue to be encouraged to invest in such industries as electronic information, petro-chemicals, chemicals and automobiles. They will be urged to take part in the reorganization and transformation of the country's traditional industries including machinery, light industry, textiles, raw materials, construction and building materials and to invest in infrastructure facilities and environmentally-friendly projects, especially ecological and environmental projects in central and western China. Besides, it is important to actively and steadily spur service-trade sectors such as banks, insurance, securities, telecommunications, commerce and freight transport to open wider to the outside world.
Large multinational companies are encouraged to shift their high-tech and high-value-adding processing and manufacturing sectors and their research and development institutions to China, and to set up production and manufacture bases, auxiliary bases and training bases so as to bring the effect of technological overflow into play and enhance Chinese enterprises' own ability to blaze new trails.
After being admitted into the World Trade Organization, China entered a new stage featuring comprehensive international economic cooperation and competition in utilizing foreign funds.
In the 10th Five-Year Plan period (2001-2005), China actually used a total of about 383 billion U.S. dollars of foreign funds, 34 percent more than in the Ninth Five-Year Plan period. The total includes 286 billion U.S. dollars of direct overseas investment, 38 billion dollars of funds raised by Chinese enterprises' listing abroad, and 46 billion dollars of overseas credit.
With State Council's approval, the program is drafted by the National Development and Reform Commission after consulting with 40 units at the level of ministries, 11 national industry associations, provincial governments throughout the country, some research institutes, enterprises and scholars, according to the preface of the program.
