In the National Business Work Conference, one of eight tasks on business this year is to improve the quality of utilizing foreign capital, the keys of which are to attract foreign capital to boost the growth of modern service business and optimize regional layout of foreign investment and create new modes of foreign capital utilization.

Hao Hongmei, an associate research fellow from Foreign Investment Department of Academy of MOFCOM, pointed out the proposed focal points of tasks indicated that the strategic aims of China to attract foreign capital had changed from mainly making up “Two Gaps” to optimizing capital allocation, propelling technical development and perfecting market economic system, so as to direct foreign investment from scale and speed-oriented to quality and efficiency-oriented to drive the upgrade and adjustment of foreign capital structure.

Zhang Li, from Department of Foreign Capital Layout Optimization of Academy of MOFCOM, said China’s starting point and guiding principle on attraction of foreign capital in the future would be optimization of the quality and structure of foreign capital, and well use of foreign capital to serve for the rapid and sound economic growth.

Commerce minister Chen Deming noted that provinces in central China including Anhui, Hunan, Hubei and Jiangxi, where next to Pearl River Delta and Yangtze River Delta, were hoped to bring their regional advantages into full play and make active preparations to seize opportunities to take transferred processing industries.

Currently, from perspective of optimization of regional layout, many measures issued will effectively promote the regional layout optimization since foreign investors are encouraged to invest in central and western areas and old industrial base in northeast of China. China amended Catalogue of Priority Industries for Foreign Investment in the Central-Western Region in 2004 to expand scopes for foreign investment under encouragement. It has released policies and measures on furtherance of opening-up, revitalization of old industrial base in northeast of China and acceleration of the rise of central China in 2005 and 2006.

Investment solicitation for service outsourcing has become a hot word in commercial departments of all levels, as shown by their business work reports of the new year. With the “bottlenecks” of environment, resources and land, service outsourcing has stood out as the best way to utilize foreign capital to make structural adjustment due to its features of considerable technical value and high added value as well as low resource consumption. It will benefit for not only the improvement of the utilizing level of foreign capital, but the required upgrade of industrial structure and change of trade growth ways.

Meanwhile, the Ministry of Commerce (MOFCOM) has stressed on the taking of global service outsourcing. By the end of Dec., 2007, 11 cities were recognized as “Base City for Chinese Service Outsourcing”, including Dalian, Xi’an, Beijing, Shanghai and Wuhan; and Suzhou Industrial Park and Wuxi Taihu Lake Protection Area were recognized as Chinese Service Outsourcing Demonstration Zone by the MOFCOM, the Ministry of Information Industry and the Ministry of Science and Technology. The international service outsourcing that China has taken nowadays has certain scales in fields of software, digital processing, biz intermediation, animation production, design and R&D.

Analysts also emphasized that the issue of laws of income taxes and new catalogues all shown the country’s encouragement of foreign capital to some specific areas and industries. To enjoy a fast development, foreign-invested enterprises are suggested to lay stress on these and formulate relevant strategies based on their own edges. With the gradual perfection of Chinese laws and regulations on M&A by foreign investors, China has a bright future with respect of economic growth. According to a survey on China-base US enterprises by US Chamber of Commerce, more than 90 percent of such enterprises had optimistic outlook on their biz in China in the coming 5 years.

Just as Jiang Zengwei, vice minister of MOFCOM, said, the adjustments of policies and regulations that Chinese government made were to create a fair, open and regulated market environment for all sorts of enterprises, which was good for sound development of enterprises, further international trade cooperation and balance growth of global trade.