China welcomes foreign investment in high-tech industries, not key industriesPublished by MAC on 2007-03-23
China welcomes foreign investment in high-tech industries, not key industries
The Ministry of Commerce (MOFCOM) yesterday encouraged foreign companies to invest in Chinese industries involved in high-technology, energy conservation and environmental protection, as well as in the technical reform and upgrade of traditional industries, but said the government will maintain control over the nation's key industries.
According to MOFCOM, foreign investment is welcomed in sectors including finance, logistics, information technology, software and technological research and development.
Foreign companies will be restricted from investing in high energy-consuming, high polluting and low value-added production industries. Foreign capital will be particularly restricted in the real estate sector.
Strategic foreign investment in listed domestic companies will require appropriate guidance and supervision, according to MOFCOM.
MOFCOM said that the government will strengthen relevant regulations to prevent monopolies and hostile takeovers by foreign companies and to ensure it maintains control over key national industries.
The Chinese government has not approved any new steel project or any capacity expansion projects funded by foreign companies since 2005. Arcelor Mittal's share acquisition proposal for Shanghai-listed Shandong Laiwu Iron and Steel Co. Ltd. has been awaiting government approval for over one year.
The total foreign investment into China's steel industry was $141 million last year, down 66.67 percent from the previous year.
China attracted $69.5 billion worth of foreign investment in 2006, 4.06 percent lower than the previous year. An additional 41,485 foreign-funded enterprises were established in 2006, down 5.76 percent from 2005.
Twelve foreign joint venture banks, insurance companies and fund management companies were established, down 33.33 percent from 2005, attracting $6.447 billion, down 46.46 percent, according to MOFCOM.