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2010-09-10 | All chapters

Govt reassures foreign firms
Wang Xinyuan, Global Times, 2nd September 2010

After months of complaints about investment obstacles, the government has come out to reassure foreign firms about their value to the economy.

China will continue to provide an open and fair environment for foreign investment, and foreign firms will enjoy more opportunities and economic returns in the future, said Vice President Xi Jinping at an investment forum in Xiamen, Fujian Province Tuesday.

"In China, 22 percent of tax revenues and 45 million jobs come from foreign-invested enterprises," noted Xi.

Recently, many foreign firms have worried that the investment environment in China is deteriorating. According to a survey of the European Union Chamber of Commerce (EUCCC), though many European companies are confident about future opportunities in China, they still doubt the fairness of policies due to the government's protection of local players.

Many high-ranking officials recently defended China's status as a favorable destination for foreign investment. Shen Danyang, an official with the Ministry of Commerce, disputed statements about China's deteriorating investment environment.

Shen stressed that the total foreign investment in China in 2009 reached above $90 billion, despite a 40 percent drop in international overseas investment.

In the first half of this year, the foreign investment in China increased 19.6 per-cent, which far exceeded that of other countries. According to a report from the United Nations released Tuesday, China has become the No. 2 FDI destination, exceeding Germany, UK, and France.

Foreign firms, however, still have their concerns.

"China is clearly an attractive market, but there are some areas in which foreign-invested companies do not receive equal treatment. What the chamber seeks is an equal playing field for all companies legally registered in China," said an official with the EUCCC.

"Though our member companies remain committed to the China market, there are issues that must be addressed to improve the business climate for foreign companies and to ensure China will con-tinue to welcome US products and investment (in the future)," an official with the American Chamber of Commerce told the Global Times through email.

"China could further enhance the quality of the FDI it receives by opening new sectors to foreign investment and by continuing to improve regulatory transparency," said the official with the EUCCC.