Local officials given more power to attract foreign capital

(Xinhua)
Updated: 2009-03-12 23:25

BEIJING -- China's Ministry of Commerce (MOC) announced measures Thursday that would give more power to its local branches on approving foreign-funded projects in a bid to further facilitate foreign investment.

The establishment or change of foreign-funded companies with a registered capital of $100 million or below would be subject to the approval of provincial commerce authorities where the company was registered, according to the new regulations.

However, one-off capital increase of more than 100 million dollars still has to be approved by the MOC.

Local commerce authorities, together with local taxation and foreign exchange departments, would be allowed to review the mergers and acquisitions, in which a foreign investor bought a domestic company for as much as $100 million or $50 million, depending on whether the deal was under the encouraged or limited category.

The MOC and National Development and Reform Commission jointly released the country's new foreign investment catalogue, which took effect December 1, 2007. The catalogue mapped out the encouraged, limited and prohibited industry categories for foreign investment.

The country's actual use of foreign investment plunged 32.67 percent year-on-year to $7.54 billion in January. Foreign investment use has fallen since October, when a 2.02-percent annual drop was recorded.