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Investment procedures simplified
By Fu Jing (China Daily)
Updated: 2004-11-30 08:48
The current robust foreign investment in China is expected to maintain its
momentum as the central government streamlines procedures and decentralizes
approval rights.
Overseas investors will no longer be required to submit investment
feasibility reports if they decide to set up business in China.
At the same time, government departments will be required to respond within
20 days to applications from overseas investors.
A spokesman from National Development and Reform Commission (NDRC) said
China's ongoing reform of its investment system will create a more favourable
environment with simpler procedures.
The current changes simply deepen reforms that started in July. The efforts
are aimed to enable businesses, instead of governmental organizations, to make
final decisions on investment and the market to allocate resources.
In line with State Council's efforts, the NDRC, which approves large-scale
foreign investment, issued an updated approval procedure for overseas investment
in October.
The spokesman said the reform will also give China's provincial governments
more say on approvals of foreign investment projects, which are divided into
four categories: those that are encouraged; those permitted but not encouraged;
those that are limited and those that are forbidden. For example, those that
will cause environmental pollution are forbidden.
Provincial governments will have the right to authenticate projects worth
less than US$100 million, up from a top limit of US$30 million.
In addition, for projects still limited, the benchmark for provincial
government approval will also be raised from US$30 million to US$50 million.
Jing Yunchuan, member of the Canada-China Business Council told China Daily
that the reforms will give investors greater freedom to make their own decisions
and ultimately make them responsible for their own bottom lines.
Jing, also a lawyer from the Beijing-based Gaotong Law Firm said the
government should play a bigger role in protecting investors' legal rights,
while using macroeconomic controls and intermediary organizations to build a
sound investment environment.
"Enterprises, banks and the government will play different and more
independent roles after this round of investment reforms. Especially the banks
will have a decisive say on whether they will lend money," said Jing.
Foreign investors generally welcomed the reforms, but some complaints
lingered.
"I think it is great and encouraging seeing that the Chinese Government is
taking such a proactive role in helping foreign enterprises and the new policies
are all heading in a good direction," said James Jao, president of the US-based
Jao Design International.
Jao Design has now opened branches in several cities, riding the wave of the
country's urbanization boom.
But he said more efforts are needed.
"Foreigners often get confused with the myriad regulations in China. It is
good to streamline the layers of approval as much as possible."
He also suggested the government should set up a hotline to answer questions
quickly.
Despite the complaints, China's foreign direct foreign (FDI) investment in
October was up by over 53 per cent on the previous year, bringing 2004's total
so far to more than that for the whole of 2003, which stood at US$53.5 billion.
Actual FDI was US$53.8 billion in the first 10 months, an annual rise of
23.47 per cent, according to the Ministry of Commerce.
The World Investment Report 2004, released by the UN Conference on Trade and
Development in September, predicted FDI would hit US$60 billion this year,
compared with US$53.5 billion last year.
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