How has the rate of investment in Beijing changed over the last few years?
In recent years, investment has been growing rapidly. Over the last few years, the figures have been as follows:
1990: US$117m, up 39 per cent on previous year
1991: US$285m, up 143 per cent
1992: US$1467m, up 414 per cent Jan-April 1993: US$2471m, up 443 per cent on same period 1992
Investment from Hong Kong, Taiwan and the US is increasing at the fastest rate.
What are the factors affecting this rate?
The stability of China's political and social' situation, first of all. Also, the continual growth of the national economy, the large capacity for investment, the potential of the market and the continuous expansion of the use of foreign capital, while maintaining the open policy.
The present international environment and economic situation has created favourable circumstances for us to absorb more foreign capital. We have grasped this opportunity, improving investment conditions and speeding up our use of foreign capital.
Municipal construction is developing quickly and the real estate business has opened up to the outside world – accelerated by the use of foreign capital.
Many internationally famous companies like Philips, Siemens, National, Bausch & Lomb and Chai Thai Group have already established enterprises in Beijing and have so far achieved good economic results. This in turn has strengthened foreign investors' confidence.
How has the development of the SEZs and the southern Chinese cities affected the attraction of trade to Beijing?
Just as there is rivalry among foreign investors, so there is competition between China's cities and provinces to absorb foreign investment. That's just life. But at the same time, we should understand that overseas investors' success in south China not only strengthens the confidence of investors outside China in the market as a whole, but the inner provinces, cities and Beijing, seeing the success of the SEZs, have quickened the pace of developing foreign investment.
The decisive factor however is that under the state's general law, investors both at home and abroad put their own and their partners' priorities into action, choosing cooperation projects, partners and sites. Beijing will make full use of its priorities to attract investors from outside China, being the centre of politics, culture, science, education, tourism and international contacts. It also plays an important part in northern China's industry, commerce and trade and is home to the largest number of experts and specialists.
Are any special concessions offered to investors that choose to focus on Beijing?
Generally speaking, the preferential policies towards the investors outside China are stipulated by the state's legal regulations. Any investors from outside China can enjoy the preferential policies which are approved by the state. With the official approval of the state council, the foreign-invested new and sophisticated technological enterprises in the Beijing New Technology Industry Development Experimental District (100 square km) enjoy similar policies to those in the southern SEZs.
From what countries do the investors mostly come from?
Over 60 countries or regions' invest here. The following invest the most: Hong Kong injects 50 per cent of the total capital from outside mainland China, US: 10.5 per cent, Taiwan: 10 per cent, EC: 5 per cent.
Are there any industries that Beijing is particularly targeting?
The city's infrastructure (eg. underground, express highways), construction, reconstruction of the old city's development of industrial districts and science and technology areas and the fine processing of agricultural products and by-products. Developing technologically-advanced export-oriented industries such as electronics, automobiles, fine chemicals, precision machinery, instruments and meters, modern building materials, light industry, food and the commerce sector.
To what extent are prices of raw materials stable in Beijing at the moment?
In the past year (or more), with the acceleration of economic development, and the rise in investment, the supply of steel, cement, petrol and other raw materials has been unable to meet demand, and the range of prices considerable. It is estimated that the prices of the raw materials have now reached their peak, and are generally stable. China is now developing the production of raw materials, to gradually solve the conflict between supply and demand, and the prices materials will be kept stable and at a reasonable level.
Foreign enterprises complain of the bureaucracy involved in setting up a business in China – to what extent is this improving in Beijing?
When issuing permits to foreign investors, there is some bureaucracy involved in our working style, but with Beijing continuously expanding its opening to the outside world, and improving its investment environment, things have been changed noticeably.
First of all, in the expansion of the "autonomous management" of enterprises. The legal representatives, under the state's laws and regulations, can decide themselves to have talks and negotiations with foreign investors, they can make their own judgements, if the conditions are suitable. The government is transferring its approval power to its subordinates, to simplify the procedures – simplifying the methods of granting approval, restricting the time involved, improving office conditions, reforming working styles and gradually forming a system for supervision and inspection.
At the same time, a number of consultancy bodies for external services have been established, to act as agencies for foreign businessmen, procuring legal documents and facilitating, the procedures for gaining approval. They take on the responsibility for the whole process for the convenience of foreign investors.
We have noticed that many points still exist that are not satisfactory, but we are making every effort to improve them, so that the above-mentioned requirements can be met.
Another complaint from western investors is that the demand for joint ventures to re-export is a heavy one. Are there any steps being taken to modify this?
We do require foreign-invested enterprises to have a certain proportion of products for export in order to keep the balance of its foreign currency, and to ensure the foreign investors remit their profit. But to those foreign investors who invested in advanced technology, we have made and will make further con-cessions, permitting larger domestic sales of their technologically-advanced products. For instance, the Sino-US joint venture, Beijing Jeep, Bausch & Lomb, the Sino-German joint venture programme-control exchanger, Stone office supplies joint venture etc. These products are mostly sold within China. We have so far adopted and will continue to adopt methods to help this kind of enterprise to keep its foreign currency balance. *