Mainland is 'average' for investment
CHINA was rated 'average' as a place in which to invest, as it needed improvement to attract foreign investment according to a survey conducted by a non-government organisation, Horizon.
The first nation-wide survey, devised to elicit foreign firms' views on China's potential to attract investment, business people said that they were put off by China's high inflation rate.
Although they were happy about the labour supply, they were dissatisfied with the quality of employees' output.
The survey, the first of its kind, covered 1,403 foreign investors in 39 cities.
The results showed that the business community was concerned about inflation getting out of control, low standards of market research, and poor quality of worker output.
However, China's legal system, which is the fourth aspect investors found unsatisfactory, was attacked at a seminar discussing the survey results.
Priscilla Lau Pui-king, associate head of the Department of Business Studies at the Hongkong Polytechnic University, said that China had, over the past few years, focused on infrastructural development and did not do much about its legal system.
She said that business disputes had risen sharply in Guangdong courts but the legal framework and staff were inadequate to cope with them. 'Many complicated cases were dealt with in a couple of months or even days, but one would doubt the accuracy and fairness of the verdicts given by the court,' said Ms Lau, who is also a Hong Kong representative of Guangdong People's Congress.
She said that a lack of information had confused foreign investors about their rights and obligations and had discouraged them from striking business deals.
Mr Chan Man-hung of the university's China Commercial Centre echoed her views and added that special emphasis should be put on the property sector, as well.
He said that Guangdong, which was among the first provinces in China to open to foreign investment and had, over the years, attracted much foreign investment, was ready to improve its legal framework.
'To stay competitive, it must lower its crime rate and put emphasis on property sales control,' said Mr Chan.
Mr Victor Yuan, president of Horizon, said that Shenzhen, Shanghai and Beijing were still the main cities attracting foreign investment.
However, investors were interested in newly developed cities, as well.
Mr Yuan said that prime investment cities such as Shanghai, Beijing and Guangzhou were facing stiff competition from other places such as Loyang, Kunming and Shenyang in their bids to attract foreign investment.
