7. What measures will the Chinese government take to expand the scale and enhance the level of foreign investment introduction in the Tenth Five-Year Plan (2001-2005)?

In its Tenth Five-Year Plan period, China will enter a new stage of reform and opening. On gaining WTO access, China will have still more opportunity to introduce foreign capital, technology and managerial experience, upgrade and optimize its industrial structure, and expand export. Meanwhile, China will face the severe challenge of fierce international competition. The Chinese government will continue to adopt measures to absorb foreign capital, in still larger amounts and for even better utilization, and continue to promote readjustment of its industrial structure and balance in regional economic development. The state will further regulate government administration and enterprise operation in line with international practice, and improve and optimize investment environment. The Chinese government will take the following steps to expand the scale and enhance the level of foreign investment introduction.

1). Foreign capital introduction will be closely linked with Western Development. In implementing the Western Development strategy, there will be more opportunity for foreign investment within infrastructure construction, environmental protection and technological development. The government will coordinate and encourage foreign-invested companies in China to re-invest in central and western regions. State level economic and technological development zones will fulfill a demonstration role in promoting successful working exchanges between the east and west. The state will push forward projects for piping gas and transmitting electricity from the west to the east, and meanwhile propel foreign investment input in accessory infrastructure facility construction. Various methods will be adopted to help people in western China be more open to new ideas and concepts and improve their investment environment.

2). Transnational companies will be encouraged to invest in high-tech industry and infrastructure. Effective measures will be adopted to encourage transnational companies to invest in the construction of R&D centers and regional headquarters. Foreign-invested enterprises will be encouraged to carry out technological innovation, improve their technological level and capacity for independent exploration, and train scientific and technological talent. Efforts will be also made to explore the utilization of risk investment, set up a Sino-foreign risk investment fund, promote the utilization of foreign capital in high technology, and advance China's industrial restructuring.

3). In accordance with China's commitment upon the entry of the WTO, China will push forward, step by step, the opening of banking, insurance, telecommunications, domestic and foreign trade and tourism to the outside world.

4). In the interests of keeping pace with the trend of global investment, China will explore the involvement of foreign investment through acquisition and merger in the reorganization and transformation of state-owned enterprises. International experience in acquisition and merger applied to state-owned enterprises will be studied for the formulation of rules and regulations regarding foreign purchase and merger of state-owned enterprises. The experience of foreign companies in participating in the transformation of state-owned enterprises by setting up joint ventures and introducing technology will be utilized to enhance modes of cooperation between state-owned enterprises and foreign businesses, particularly large transnational companies.

5). Existing economic rules and regulations will be re-examined, revised, improved and made more transparent. China will study carefully WTO regulations and take active moves to meet changes brought about by China's WTO membership on its legal system, management system, import and export administration and foreign exchange balance. Laws, regulations and policies on foreign investment will be re-examined in accordance with WTO requirements; the foreign investment approval and administration process will be upgraded in order to simplify the approval procedure and raise working efficiency. A new foreign investment industry policy will be formulated as soon as possible.

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