Mainland vows to lower barriers to foreign investment in service sector
Cary Huang in Beijing
Beijing will gradually scrap restrictions on geographical areas, stock ownership and business scope of foreign investment in the service sector, according to one of the country's senior economic planners.
Zhang Mao, vice-minister of the National Development and Reform Commission (NDRC), the top planning agency, said the government planned to attract more foreign investment in the service industries.
'China's move to gradually reduce barriers to foreign investments in the service business is part of a broader strategy to go for more eco-friendly and less wasteful 'quality investment',' The Economic Information Daily quoted Mr Zhang as saying yesterday.
'The aim [of the policy] is to absorb advanced technologies and management skills from foreign countries,' Mr Zhang told a forum of chief executives of multinational companies, the newspaper reported.
Assistant Commerce Minister Chong Quan, speaking at the same occasion, said the country was encouraging multinationals to expand into outsourcing services. He said his ministry had assigned 10 leading cities including Beijing and Shanghai, where 'conditions are mature', to experiment in foreign investment in outsourcing services.
The mainland topped the world in attracting direct foreign investment in recent years as multinationals moved their production bases to the country to benefit from lower costs. China attracted US$6.8 billion last month, up 13.2 per cent from a year ago, the government said last week.
Service sectors, particular banking, insurance and stock exchanges, are among the last few industries where restrictions on foreign investment are still imposed.
The floundering Doha Round of free trade talks of the World Trade Organisation were aimed at removing barriers on foreign investment in the service sector.
Mr Zhang said the central government would not change its policy of restricting foreign investment in key industries to protect national economic security. He said the government would stop export-promotion policies and restrict or prohibit foreign investment in projects that are polluting and energy-intensive.