China's investment environment not deteriorating
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E-mail Xinhua, March 6, 2012
A political advisor on Tuesday refuted commentators' accusations that China's investment conditions are deteriorating, claiming instead that the country's foreign investment is at a relatively high level.
"Some media or commentators think that China's investment environment is deteriorating. With that I cannot agree," said Ma Xiuhong, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC).
Ma made the remarks at a press conference on the sidelines of the CPPCC's ongoing annual session.
Ma, who is also a former vice minister of commerce, said China's utilization of foreign investment in 2011 reached a record high of 116 billion U.S. dollars, up 10 percent year-on-year.
"The growth of 10 percent is rather high under the backdrop of low transnational investment globally," Ma said, adding that more than 27,000 foreign companies set up new businesses in China within the year.
By the end of 2011, China's total utilization of foreign investment exceeded 1.177 trillion dollars, with more than 730,000 foreign companies setting up businesses in China to date, according to Ma.
Ma attributed the rise to the continuous improvement of China's investment environment, as well as the country's stable economic growth and rising international competitiveness.
"Foreign investment is playing a more and more important role in the country's economic development," Ma said.
Registered foreign companies in China account for nearly 3 percent of the country's enterprises in number, but their tax revenue accounts for 21 percent of national total, she added.
Ma said, "China should continuously improve the investment environment so as to create a more favorable environment for the development of foreign companies."
Although progress has been made in attracting foreign investment, there are still several challenges that need to be addressed, Ma said.
China used to face competition from developing countries in wooing foreign investment, but the competition is shifting to developed countries such as the United States, as these countries are working to reinvigorate their real economies, Ma said.
Foreign companies in China are facing a changing situation, too.
A series of preferential policies previously offered to foreign companies have been annulled, forcing them to compete with Chinese companies on the same playing field, Ma said.
Foreign companies have also had to cope with the rising costs of labor and land, as well as costs related to environmental protection.
Ma said the government needs to further deepen its reforms and facilitate trade and foreign investment under the new circumstances.
The government should actively guide foreign investment into areas that have been previously ignored to help these areas develop, Ma said.
