(Xinhua)
Updated: 2007-11-18 09:34

China will gradually scrap restrictions on the destination, stock ownership and business scope of foreign investment in the service sector, a senior economic planner said in Beijing on Saturday.

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Zhang Mao, vice minister of the National Development and Reform Commission (NDRC), said the country would stick to its opening-up policy and promote a "quantity-to-quality transformation in attracting foreign investment".

He added existing restrictions on foreign investment in key industries concerning China's national security and its citizens livelihood remained unchanged.

"The point (of the transformation) is to absorb advanced technologies and management skills from foreign countries," he said. "Foreign investment companies are expected play a positive role in this regard."

Speaking at a multinational CEO roundtable on Saturday, he said foreign investment would be encouraged to enter high-tech, equipment and new material manufacturing and logistics businesses. He added the central and western hinterlands were open for foreign investment with more incentives.

But Zhang stressed that foreign investors were restricted from setting up businesses for export only in China and banned from creating polluting projects and those that rely on consuming too much energy and resources.

Chinese authorities would also help to create a sound investment environment by simplifying examination and approval procedures and steadily accelerating the free exchange of the country's currency under the capital account.

The government would establish a cross-department supervision mechanism over foreign mergers and acquisitions in effort to safeguard national economic security, he said.

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