Regional
Policies
We
should adopt powerful measures to direct and encourage foreign
investments to flow to the central and western regions while giving
full play to the advantages of eastern regions at opening up and
utilizing foreign investments and giving support to the eastern
regions in active development of capital-intensive,
technology-intensive and export-oriented industries
The
central and western regions in China include all together 19
provinces, municipalities and autonomous regions, which provide vast
land, rich resources, large population, low labor cost and large
market potential. And there are many important industrial cities and
educational as well as scientific and research centers in that
region. However, with the geographic environment conditions,
historical problems, the unbalanced economic development and
policies, the central and western regions starts very late in
opening and absorbing the foreign direct investment with a small
investment volume and a low-leveled investment utilization.
At
present, major policies adopted by the Chinese government to
encourage foreign investment in the central and western regions
includes:
1.
Industries and projects of
comparative advantage in Central-Western China may, upon approval of
the state, enjoy policies applicable to projects labeled as
encouraged category in the Industrial
Catalogue Guiding Foreign
Investment. Conditions and degree of opening shall be made more
in favor of projects of restricted category or with a limit for
foreign participation in this region than in Easter China.
2.
Domestic funds shall be
properly increased to support foreign-invested projects in this
region. Foreign government loans and credit facilities of
international financial institutions shall mainly be used to finance
key infrastructure and environmental protection projects in this
region.
3.
The foreign invested
enterprises in the central and western regions, which are encouraged
by the nation, will enjoy the privilege of 15% cut on income tax
within three years after the expire date of the current preferential
tax policies.
4.
The foreign invested
enterprises located in the eastern regions will be encouraged to
reinvest in the central and western regions. In case a project
involves foreign participation of over 25%, the project shall enjoy
the treatment as a foreign-invested enterprise.
5.
The foreign invested
enterprises in the coastal regions are allowed to contract to manage
the foreign invested enterprises and domestic invested enterprises.
6.
Provinces, autonomous
regions and municipalities directly under the central governments in
the central and western regions are allowed to select an established
development zone in the provincial capitals or capital cities to bid
for establishing economic and technological development zones at
national level.
7.
The nation will give
priorities to projects regarding agriculture, water conservancy,
transportation, energy, raw materials and environmental protection
in inviting foreign investments in central and western regions and
at the same time, the Country will increase its support to these
projects both in terms of supporting fund and relevant measures.
By
the end of the year of 1998, the number of foreign invested
projects, the volume of contractual foreign investments and the
value of realized foreign investments in the central and western
regions accounts respectively for 17.88%, 11.65% and 12.17% of the
total in the nation.
To
encourage the foreign investors to invest in the central and eastern
regions is one of the important steps toward achieving fast
development in the region. In recent years, the Chinese government
has also given more supports to the investments in the central and
western regions and investment environment in the regions have been
improved greatly.
(Source
ChinaFDI.org.cn. For more details regarding FDI related information
on China click
here)
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