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Ladies and gentlemen,
In the golden autumn, I am very happy to welcome the distinguished guests to China West Forum 2001 in the ancient capital Xi'an, an age-old and mysterious city full of dynamism of the modern era. Taking this opportunity, I would like to brief you on the new opportunities for foreign investment in the west after China joins the WTO. I hope that foreign businesspeople could take part in the development of western regions more actively to advance the economic and social development of the vast western areas.
China has gone through a journey of 15 years in order to first resume the contracting party status in GATT and later to enter the WTO. The twists and turns over the past 15 years have been deeply embedded in the minds of the Chinese people and witnessed by each and every foreign friend who cares for and supports China's cause of modernization. However, it is a comfort to see that China's accession to the WTO has been noticeably accelerated with the concerted efforts of various relevant parties over recent years.
In May and June this year, China held consultations and reached comprehensive consensus with US and EU on the outstanding issues in the multilateral negotiation of China's WTO accession. In early and mid July, the WTO held the 16th and 17th sessions of the China Working Party Meeting, at which the substantive negotiation on China's WTO entry was concluded with the drafting of the Protocol, Working Party Report and other multilateral legal documents regarding China's WTO accession completed. I believe at the 18th Working Party Meeting to be convened in September, all the legal documents on China's accession will be eventually adopted and submitted to the WTO General Council for review, thus wrapping up the historic mission of the WTO Working Party on China. Hard endeavor of 15 years is about to turn China's entry to the WTO into a reality. ? Ladies and gentlemen,
FDI absorption constitutes an important component of China's basic state policy of reform and opening up. As the reform and opening up going into depth over the past two decades and more, China has been constantly improving its FDI utilization in terms of scale and quality. As of the end of July 2001, China had cumulatively approved 378,000 foreign funded enterprises with a contractual value of USD 717.01 billion, of which USD 372.83 billion had been actually paid in.
China has maintained a good momentum in its FDI attraction since this year. January through July, 14,000 foreign-invested enterprises were approved to establish, 18.2% higher than the corresponding period of last year, the contractual value of foreign investment grew by 45.8% to USD 40.29 billion and the actually utilized value climbed by 21.7% to USD 24.21 billion.
While the FDI absorption of the eastern areas is growing at a rapid speed, the western regions have also made obvious headway in its FDI attraction. Up to the end of June 2001, the project number, contractual value and actually utilized value of FDI in the west accounted for 7.3%, 6% and 5.3% of the national total. In the first 6 months of this year, 742 new foreign invested enterprises were set up in the western regions with the contractual value amounting to USD 1.91 billion and actually utilized value, USD 710 million.
Joining the WTO is an inherent requirement of China's development of its socialist market economy which also complies with the objective trend of the world economic progress, and it will bring about unprecedented opportunities to the economic and trade cooperation between China and various countries and regions in the world. After becoming a member of the WTO, China will open service areas such as banking, insurance, telecommunication, foreign trade, domestic trade, tourism step by step, formulate uniform, standard and transparent investment access policy, intensify efforts to enact and perfect relevant foreign related laws and regulations, improve the level of administration according to law in foreign related economic work, establish and perfect the foreign economic and trade regime consistent with the international prevailing rules and actual situation in China. Foreign business people are facing new development opportunities in making investment in China and participating in the development of western regions.
The continuous rapid economic growth in the west will generate more investment opportunities for foreign investment in the area. The rapid development over the past 20 years and more has laid down certain material and technological foundation in the west. This, coupled with social stability and gradual shaping and improvement of the market economic system, has created a favorable market environment for the sustained and fast economic progress in the western regions. The Chinese government adheres to the guiding principle of development focusing on the expansion of domestic demand and it has combined the expansion of domestic demand, economic restructuring, advancement of science and technology and promotion of opening up. As the Strategy of Developing the Western Regions is steadily pushed forward, the resource and economic advantages of the west will be brought into full play thus further raising the quality and level of its economic growth.
The country's incentives for foreign investment in the western regions have already played and will continue to play a positive role by giving forceful policy support to foreign investment in the area. In order to encourage foreign businesspeople to intensify investment in the central and western regions of China and further accelerate the economic development of the area, since 1999, the country has unveiled a series of preferential policies for foreign investment in central and western China, including the enlargement of open up areas, diversification of investment modes, relaxation of investment restrictions, more preferential taxation policy for foreign invested enterprises in encouraged fields, intensification of financial support to investment projects and the cultivation of a sound investment environment by establishing economic and technological development zones at national level. Since the Circular of the State Council on Several Policy Measures concerning the Implementation of the Development of the Western Regions was issued, various policy measures to encourage foreign investment in the west have been further complemented and improved. With China's upcoming accession to the WTO, the Chinese government will adopt positive measures in the following nine aspects to attract more foreign investment to the western regions.
1.To amend in time the Industrial Catalogue for Foreign Investment in the Central and Western Regions to effectively play out the resource and economic advantages of the west, underlying economic development with characteristics.
2. To improve the Provisional Regulations on Investment By Foreign-funded Enterprises in China to create conditions for the reinvestment in the west by foreign invested enterprises along the coast and realize the grads transfer of industries.
3. To further expand areas for foreign investment in the west and encourage foreign investment in agriculture, forestry, water conservancy, communications, energy, municipal utility, environmental protection and other basic fields as well as infrastructure construction and mineral, tourist and the like resource development.
4. To study incentives for foreign investment in the country's key projects such as electricity and gas transmission from the west to the east, water diversion from the south to the north and Qinghai-Tibet Railway in a bid to pace up infrastructure construction of the western regions.
5. To study and formulate various policy measures governing merger and acquisition of state-owned enterprises by foreign investors, investment in the form of BOT and TOT and overseas public offering of foreign funded enterprises in China.
6. To encourage foreign invested enterprises to introduce and develop advanced technology and conduct technological innovation. Positive guidance will be offered to foreign businesses especially transnational corporations to invest in high and new technological industry, capital- and technology-intensive industries, set up R&D institutions and build more projects with state-of-the-art technology.
7. To expand the trial opening up of banking, insurance, commercial retail, foreign trade, telecommunication, tourist agency, construction and its related services, Sino-foreign joint venture accounting firms and law firms to qualified central cities in the middle and western regions with conditions for the establishment of foreign invested enterprises in those fields properly relaxed.
8. to encourage small- and medium-sized enterprises to take an active part in the international cooperation and promote foreign businesspeople to invest in electromechanical products, spare parts industry, raw material and other supporting and export-oriented foreign exchange generating projects. ?
9. To stick to the development guidelines focusing on industrial projects, FDI absorption and export, with a special emphasis on high and new technology development. To continue to run economic and technological development zones at national level successfully, giving full play to their role as demonstration projects and driving force, so as to bring along and promote the development of other areas.
The Chinese government will make elaborate efforts to improve the investment climate to make the environment more attractive to foreign investors. At present, the focus is on perfecting the soft environment for investment.
First, we'll create a complete and well-established legal environment. According to its commitment to join the WTO, China is quickening the amendments to and formulation of relevant laws and regulations to attract FDI and perfecting its foreign related economic legal system. It is strengthening protection of intellectual property rights and safeguarding the legitimate rights and interests of foreign invested enterprises. It is setting up a uniform, standard and open foreign investment access system and reducing items subject to examination and approval.
Second, we'll cultivate a uniform, transparent and predictable policy environment. China is improving and strengthening management of and service to foreign funded enterprises, pacing up the establishment and perfection of social credit system and improving the financing environment for foreign invested enterprises. China is making use of the complaint centers of foreign invested enterprises to well accept and hear cases and to protect the legitimate rights and interests of foreign funded enterprises according to law.
Third, we'll establish a clean, highly effective, fair and standard administrative environment. Governmental functions are being transformed at a higher speed with the sense of administration according to law built up and administrative efficiency raised. Conducts of intermediary institutions are being standardized to better serve foreign invested enterprises.
Fourth, we'll maintain and improve a fair and open market environment. Random fees and fines, unauthorized inspections and compulsory donations are firmly prohibited in pace with the on-going rectification and standardization of market economic order conducted by the Chinese government. Regional protection and industrial monopoly are being broken down, so as to create a uniform and open market environment for fair competition of foreign funded enterprises.
Ladies and gentlemen,
China has attained an annual average growth rate of 9.7% for its national economy since the inception of reform and open up policy. China has evolved to an extremely attractive and realistic big market in the global context. Many farsighted businesspeople have paid their attention to China and to the western regions and got generous profits in return of their investment activities. I believe that more opportunities will be created for foreign businesspeople to participate in the development of western China following our WTO accession and greater space for development of themselves. In the meantime, the economic potential of the western regions could be tapped to a deeper degree. The development of the western regions will surely serve as a bridge connecting businesspeople all over the world and the Chinese market, and promote China and the world to achieve common economic development and prosperity.
Thank you all.
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