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China's financial hub is to further open its service sectors to overseas investors through an upgraded investment environment, a senior government official said yesterday.
Vice-Mayor Jiang Yiren said Shanghai welcomed foreign direct investment (FDI) in sectors such as tourism, education, public transportation, exhibition, logistics, as well as auto-related services.
Jiang made the remarks in an address to the city's annual foreign investment working conference.
"Sedan tenancy and the auto mortgage market show a lot of potential for expansion over the following years," said Jiang.
Overseas businesses were also welcome to invest in urban construction, including the city's metro projects, according to Jiang.
Shanghai has ploughed in US$6.85 billion of contracted overseas investment, representing a year-on-year increase of 36.8 per cent, according to the latest statistics publicized at the meeting.
Actual utilized overseas investment reached US$2.74 billion in the first seven months of this year, an increase of 36.8 per cent on the same period last year.
Shanghai is now seeking to introduce US$8 billion contracted overseas investment, with actual utilization of US$4.5 billion this year.
Shanghai will also remove more restrictions on the forms of entry to foreign investors.
The city welcomed foreign investment in joint ventures and wholly owned foreign businesses; overseas investors were permitted to invest through mergers or acquisitions of local businesses.
Shanghai municipal government also encouraged multinational companies and purchasing groups to establish their regional headquarters in the city, according to yesterday's meeting.
Jiang told the meeting that multinationals would be allowed to engage in foreign trade if they set up their Chinese headquarters in Shanghai, according to new policies enacted by the municipal government.
But the policies also required these companies to have large assets and at least three subsidiary companies on the mainland.
Shanghai's eagerness to open more service sectors to overseas investors was largely due to fierce competition at home and abroad, Jiang said.
Jiang noted the strengthening of regional economic co-operation around the world, especially in the European Union, was having negative effects on the introduction of overseas capital.
The Asian market witnessed a dramatic decease in the inflow of international capital, with a drop of nearly 20 per cent in the first half of this year compared to the same period last year.
Jiang said the Chinese mainland, as well as Shanghai, was also feeling increasing pressure.
Jiang revealed the city is preparing to enact a series of regulations and preferential policies to reduce investment costs in Shanghai.
The city aimed to introduce more industrial projects in its suburbs by cutting land costs, according to the government.
(China Daily September 3, 2002)
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