1、1Same Game,New Rules Define Foreign Business OpportunitiesFOREIGN investment has pro-vided much of the fuel for Chi-nas economic rise over the past30 years,with its infusions ofcapital,technology and modern manage-ment concepts.In Chinas manufactur-ing powerhouses - the Pearl River Deltaand the Yang
2、tze River Delta - a goodportion of local factories whose productsare made for export are foreign-funded.These foreign businesses,and the le-gions of their counterparts in the rest ofthe nation,are the sources of much ofChinas international trade surplus,andemploy tens of millions of rural workerswho
3、se factory jobs bring extra cash totheir families. Over the past years the taxprivileges of foreign companieswere revoked and last March areview system was installed toassess the national security im-plications of foreign businessoperations.These are both out-comes of recent policy shifts,and word i
4、s spreading thatChina is getting tough with theforeign capitalists it formerlybent over to woo.Anxietiesshould be dispelled by the12th Five-year Plan adopted atthe Fourth Session of the 11thNational Peoples 2Congress,Chinas top legislature. Sources at the EuropeanUnion Chamber of Commercein China sa
5、y that for the first time in thehistory of process,the National Develop-ment and Reform Commission solicitedthe opinions of foreign companies inChina when organizing the 12th Five-year Plan draft.The interests of foreigninvestors were certainly considered whenthe national engineers developed thispla
6、n,and it is expected this kind of inputwill be sought again. New Industries witha World of Potential In response to mounting pressure onresources and the environment,the 12thFive-year Plan underlines overhaulingcomposition and industrial structureof Chinas economy,accelerating thegrowth of energy-ef
7、ficient and environ-ment-friendly sectors,new informationtechnologies,bio-technologies,advancedequipment manufacture,new energy,new materials and new-energy vehicles.All these are fields where foreign invest-ments are warmly welcomed. In the energy sector,for instance,China has set an ambitious goal
8、 for itself:to wrestle down its carbon emissions 3perunit of GDP by 4o to 45 percent by 2020.Europe,the U.S.and some Latin Ameri-can countries,such as Brazil and Argen-tina,are all on the forefront of new ener-gy and biological technologies,and can easily enter cooperativedevelopment agreements with
9、China. Pharmaceuticals is anotherpromising sector.“We believethe development of transna-tional companies will provideChinas pharmaceuticals indus-try the steam for innovation,“stated Liu Zhenxian,presidentof the R the latter are becomingpopular investment projects for thesecompanies. Sun Zhenyu,Chin
10、as first ambassadorto the World Trade Organization,toldthe media he anticipated tremendous op-portunities for international investors inChina for the coming five years.He ree-ommended sectors of higher technologi-cal 4intensity and added value,and theservice industry.International compa-nies willing
11、 to ride the tide of industrialrelocation to Chinas western provinceswould be taking advantage of yet anothertrend smoothing the way. The 12th Five-year Plan makes it clearthat foreign investment is invited to applyfor government-funded sci-tech researchprojects and technological demonstra-tion proj
12、ects.This is in fact already inaction at the local level.To attract the topdesigners in the world for the critical taskof upgrading their products,many localgovernments have set up subsidized R&Dcenters,such as the ones on hats,shoesand handbags/suitcases in Zhejiang andthose for furniture in Guangd
13、ong. Bonanza Markets The 1.3 billion Chinese populationhandily provides the largest consumergroup for almost any kind of product:70o million mobile phone subscribers,3o0 million Internet users and pensionand medical insurance systems threetimes the size of those in Europe andfour times that in the U
14、.S.These are bo-nanzas for businesses worldwide. Growing incomes and a raft of con-sumption-enticing 5policies have resultedin Chinas retailing industry reportingdouble-digit annual growth over the pastfive years,from 15.5 percent in 2009 tothe 2008 peak of 22.7 percent. The 12th Five-year Plan pays
15、 unprec-edented attention to expanding domesticdemand,in particular resident spending.Solid progress is expected in this direc-tion since measures launched in recentyears are already producing results.Theyinclude the abolition of the agriculturaltax,increases to the minimum wage,raising the tax thre
16、shold on personalincome,and subsidies granted to ruralresidents for the purchase of electric ap-pliances. Chinas per capita income is projectedto .exceed US $5,000 during the periodfrom 2011 to 2015.“In this stage Chinawill see a surge in spending on durableconsumer goods,such as homes andautomobile
17、s,and certain investmentitems,“ says Wang Shouwen,directorgeneral of the Foreign Trade Departmentof the Ministry of Commerce.“Chinesepeople will become more fussy aboutquality and brands,extending the turf ofinternationally established brand namesin China.“ This is a lesson the automakers havelearne
18、d well.Already the worlds big-gest auto market,China is the frontier ofgrowth 6for almost all leading names inthe global auto industry,which are rac- ing to set up new factories all over thenation.Its estimated that by the end ofthe year Chinas auto manufacturing ca-pacity will top 20 million a year
19、. The government-assisted “electronicappliances going to the countryside“campaign,which has clinched more thanRMB 500 billion worth of sales over twoyears,is also a windfall for internationalbrands like Samsung,LG,HP,Sharpand Sanyo.The nations brisk urbaniza-tion pace is opening new fronts for retai
20、lchains such as Carrefour and Lotus,whose new store locations expand at ayearly rate of 10 percent. The insurance sector is also set to geta new lease on life thanks to the nationalpush to give its citizens a bigger shareof public wealth.“We are serious aboutour share in the Chinese market,andwill c
21、ontinue to make more investmenthere,“ said a manager with a China-UKinsurance joint venture who preferred towithhold his name.“The Chinese markethas substantial growth potentialand is growing steadily.“ Better Legal Protection During 3 years of opening-up and reform,particularlysince 7China joined t
22、he WTO adecade ago,it has significantlyimproved its legal system,andis wiser to international rules.Whats more,awareness of legalsystems and market economiesis taking root among rank-and-file government officials and the average Chinese citizen. What revoking the tax privilege for foreign companies
23、does is to level the field for allplayers in the market,regardless of thesource of their capital.This move signalsthe maturity of Chinas legal system.Therecently introduced review on foreigninvestment for national security implica-tions is not meant to be a deterrent forforeign investors,but instead
24、 a movetowards transparency and a preconditionfor the workability of economic manage-ment,two things that are conducive to ahealthy and sustainable investment envi-ronment. On the issue of intellectual propertyrights,over which many foreign compa-nies fret,China has enhanced its cam-paigns to combat fake and shoddy prod-ucts.The latest national campaign,fromlast October to this March,was headed bythe Ministry of Commerce in partnershipwith two dozen government organs,andhas yielded some encouraging results.
