(Xinhua)
Updated: 2007-12-30 15:51

QUALITY OVER QUANTITY

The banking sector, and the service sector at large, unfolded China's ever-expanding opportunities for overseas investors.

"China will gradually scrap restrictions on the destination, stock ownership and business scope of foreign investment in the service sector," said Zhang Mao, vice minister of the National Development and Reform Commission (NDRC), the country's industry watchdog.

"China will stick to the open-up policy and promote a quantity-to-quality transformation in attracting foreign investment," said the senior economic planner.

So far, an overgrowth of trade surplus and forex reserve have brought the country a huge amount of foreign exchange, exceeding $1.4 trillion. It had incurred worries that China would narrow the range of its opening-up policies.

Chinese Vice Premier Wu Yi brushed aside such worries, and said the country would not change its stance in expanding the use of foreign capital. "China's door has been and will be resolutely opened to the outside world," she said.

Since the start of the reform and opening up in the late 1970s, China had stuck to the guideline and policy of actively, reasonably and efficiently attracting foreign investment. This had boosted the leapfrog development of the country's economy. Actively attracting foreign investment was its long-standing policy.

In the first 11 months, China utilized $61.674 billion of foreign capital, 13.66 percent higher than a year earlier, the Ministry of Commerce (MOFCOM) said.

The faster growth in foreign investment showed China's booming economy and investment environment remained attractive to overseas investors, said experts.

The country, however, remained in need of foreign investment. Despite that, it was the largest recipient of foreign investment among all developing nations for 15 successive years. It had also attracted per capita foreign investment of $53, less than one third of the world average and 1/12 that of developed nations, according to MOFCOM.

But changes were needed. The current policies to attract foreign investment were made 28 years ago when China was desperate for money and foreign currency. As the average foreign investment size expanded, it was seeking to boost foreign capital utilization quality.

"It's time China starts to be more discerning with foreign investment," said Justin Lin, director of the China Center for Economic Research under Peking University.

"Our priority now is not to attract as much foreign investment as possible, but to bring in new high-tech industries that we currently don't have. I have no doubt that preferential policies will only remain for certain kinds of foreign investors."

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