(China Daily)
Updated: 2007-11-08 07:12

The new Catalogue for the Guidance of Foreign Investment Industries should help balance out the country's trade by reducing the number of supportive policies aimed at exporters.

More importantly, it should give a shot in the arm to efforts to save energy and protect the environment by encouraging greener use of foreign investment.

The National Development and Reform Commission and the Ministry of Commerce jointly issued the revised guidelines for foreign investment yesterday.

The economy's robust growth has made China a top recipient of foreign direct investment (FDI) for many years. The latest statistics show that actual FDI increased some 10.87 percent year-on-year to $47.22 billion in the first three quarters of this year.

That massive inflow of foreign investment has, in turn, contributed not only to China's double-digit growth in recent years but also to the country's swelling trade surplus and foreign exchange reserves. It is estimated that foreign-funded companies account for more than half of China's exports.

So now that the government has decided to reduce the external trade imbalance, guiding foreign investment away from export operations will help.

However, what makes the new guidelines so crucial to the country's sustainable development is their emphasis on encouraging energy-saving and eco-friendly foreign investment in this country.

In their hunger for economic growth, many local governments have tried to absorb as much foreign investment as possible, regardless of the energy and environmental costs.

But with the authorities promising to cut energy intensity by 20 percent and pollution by 10 percent between 2006 and 2010, the blind pursuit of growth is never an option.

It is believed that foreign investors, especially those from developed countries, tend to come equipped with needed technologies and the expertise to meet stricter energy and environmental requirements.

By encouraging energy-efficient and eco-friendly production, it is hoped that the new guidelines will unleash a continuous inflow of foreign investment, driving China's campaign to go green.

(China Daily 11/08/2007 page10)