MANUFACTURING CENTER: Chinese workers assemble U.S. General Motors' Chevrolet cars in a production base in Shenyang, northeast China's Liaoning Province (CFP)

China supports qualified foreign-invested companies to float shares in domestic stock markets and to issue corporate bonds and mid-term bills to expand financing channels. Financial institutions will also give more credit to foreign-invested companies. China will prudently expand the number of foreign institutions that are qualified to issue renminbi bonds in the Chinese market. The People's Bank of China, CSRC, CBRC, NDRC and MOFCOM will be in charge here.

The scheme pointed out that approval procedures would be simplified and made more transparent. An online authorization process will also be promoted. The NDRC and MOFCOM will oversee this area.

Further improvements to the foreign exchange management of foreign-invested companies will be made to simplify foreign exchange settlement for foreign-invested companies under the auspices of SAFE.

A better place

In recent years, China has been devoted to improving the investment environment in three aspects. First, foreign capital is allowed to work its way into more industries than ever before, and the service industry has been further opened to foreign investment. Second, the legal and policy environment for foreign investment has also been greatly improved. Third, a standard for utilizing foreign capital has finally been established.

According to MOFCOM figures from 1992 to 2009, foreign investment in China increased at an annual rate of 20 percent, far outpacing the domestic GDP growth during the same period. By the end of 2009, the number of foreign-invested companies reached 680,000 and China had made use of $945.4 billion in foreign capital.

The global financial crisis, which has swept the world since 2008, has not dampened foreign investors' confidence in China. MOFCOM's figures showed China used $6.92 billion worth of foreign investment in July 2010, growing 29.2 percent year on year, marking the 12th month of consecutive growth.

MOFCOM spokesman Yao Jian said international capital's appetite in China was strong evidence that the Chinese Government's long-lasting dedication to opening up and improving the investment environment is paying off. And despite facing uncertainties in terms of the global economic outlook, foreign investment in China has maintained a sound growth rebound.

China's service industry has attracted an increasing amount of foreign capital with above-average paid-in foreign capital, Yao said. He attributed the growth to the series of policies adopted by the government to increase the opening up of the service sector. Yao also said the policy put in place in April has been positive and provided further incentives to qualified foreign-invested companies in terms of financing, taxation, customs supervision and IPR protection.

Yao said China is currently more balanced as far as utilizing foreign capital goes now that the western region is becoming more attractive to investors.

Driving exports

Foreign investors have won the lion's share of profits from their companies on China's mainland. Figures from the National Bureau of Statistics show that, last year, fixed-asset investment by foreign investors accounted for less than 10 percent of the country's total, and provided less than 11 percent of total jobs as they only hired 45 million employees. But the industrial output of foreign-invested companies took up 28 percent of the nation's total, and accounted for 55 percent of China's exports. Judging by those figures, foreign-invested companies have been reaping substantial profits with minimal investments.