New Favors Offered to the Investment in Central and Western Parts.

Foreign investment projects utilizing the advantages of human and natural resources in central and western parts will have tariff exemption on self-use equipment import.

As is disclosed at the' 98 Seminar on Foreign Economic & Technical Cooperation in Central and Western Parts of China recently held in Hunan Changsha, to open central and western parts wider China has already formulated or is formulating a series of policies to guide and encourage foreign investment towards these parts with abundant natural resources.

According to the officials of the Ministry of Foreign Trade and Economic Cooperation, in the months from January to August this year 2 182 foreign investment projects were approved, the contractual foreign capital reached 3.7 billion U.S. dollars and the foreign capital actually used was around 3.3 billion U.S. dollars in central and western parts. By the end of August, the total number of foreign-funded enterprises was 56 785 and the foreign capital actually used was nearly 30 billion U.S. dollars in central and western parts, accounting respectively for 17.8% and 12%ofthenational total, but still far lagging behind the eastern parts.

Some new investment policies have been formulated by the state this year.

(1) According to the "Interim Regulations on Guiding Foreign Investment Direction", projects which utilize human and natural resources in central and western parts of China and conform with the industrial policies of the state will be included in projects encouraging foreign investment. Provinces in central and western parts can choose advantageous sectors and projects. With the approval of the state, these projects can have exemption of tariff and import-related value added tax on self-use equipment import.

(2) Conditions for project approval and product market more flexible than the eastern parts will be defined for projects restricting foreign investment and restricting equity ownership of foreign investment.

(3) A group of agricultural, water conservation, communication, energy, raw material and environmental protection projects for foreign investment will be arranged by the state in central and western parts. More support will also be offered to self-raised capital and other related measures.

(4) National defense conversion enterprises and large and medium state-owned enterprises will be encouraged to conduct technical renovation with foreign capital.

(5) Foreign-funded enterprises in the eastern parts will be encouraged to make reinvestment in central and western parts, and projects with the proportion of foreign capital exceeding 25% are regarded as foreign-funded enterprises and have the same favors with foreign funded enterprises.

(6) Sectors and projects for opening up experiments will be allowed by the state to be conducted in central and western parts in parallel with the eastern parts, and capital cities in central and western parts can make opening up experiments on commerce, foreign trade and travel agencies.

(7) The proportion of preferential loans from international financial organizations and foreign governments will be further increased in central and western parts.