China bids to lure more investment

Government procurement contracts to be open to bids by overseas companies if the products they offer are locally made

China will lure more foreign direct investment by allowing international companies to bid on government procurement contracts - as long as their products are made in China, according to Vice-Minister of Commerce Wang Shouwen.

At a news conference in Beijing on Jan 6, Wang said the government had noticed that China's ability to attract foreign direct investment has been challenged in recent years by a number of factors, including the cost advantages of domestic production.

Additionally, nearby countries have been taking their own steps to entice more foreign investment to their shores.

"Some neighboring countries have already begun to offer more favorable policies to gain FDI to compete with China," he said. "Many developed countries are also encouraging their manufacturing businesses to move back to their home markets to boost jobs and taxes."

Wang's comments follow the State Council's approval of a document last month that aims to make the process for FDI more direct, fair, open and efficient. The document outlined the steps required to give foreign capital more market access to the country's services sector - including reviews of account auditing, financial institutions, share brokerages, fund management, telecommunications, internet, culture and education. The opening of opportunities in rail transportation, one of China's pillar manufacturing sectors, is also included to stimulate market competition.

Wang said international companies can still remit their revenues overseas or add new investments anytime. He said China's recent moves to tighten controls on capital outflows was targeting only illegal activities and was temporary.

Profits earned by international groups based on the Chinese mainland - as well as companies from Hong Kong, Macao and Taiwan in the manufacturing sector - grew by 10.8 percent year-on-year to 1.5 trillion yuan ($216.8 billion; 205 billion euros; 175.4 billion) between January and November 2016.

Li Guo, vice-minister of the General Administration of Customs, says the customs service will further simplify port clearance procedures; and it will also encourage more innovation in trade processing and more special customs-control areas to support both China's FDI and foreign trade activities.

Li says the central government is allowing local governments to set their own policies to attract FDI within their statutory powers, based on their own economic development characteristics.

zhongnan@chinadaily.com.cn

(China Daily Africa Weekly 01/13/2017 page29)