Govt eases rules in FTZs to draw foreign investors

Cityscape of Yujiapu Financial District with high-rise office buildings under construction in Binhai New Area in North China's Tianjin municipality, May 4, 2016. [Photo/IC]

The government has further relaxed rules for foreign investment in the country's four free trade zones (FTZs), much-highlighted test grounds for ongoing economic reforms, according to the central government website on Tuesday.

Foreign investors will be allowed temporarily to fund wholly owned enterprises in a number of fields, including iron and steel, shipping, auto batteries and gas station operations.

A total of 18 rules and regulations with 51 items have been revised, with more than 20 of them involving changes from review-and-approval procedure to registration-based process for foreign investment in the Shanghai, Guangdong, Tianjin and Fujian FTZs.

The State Council also approved wholly foreign owned enterprises in dozens of areas outside of the negative list on foreign investment, covering sectors ranging from agriculture to transportation.

Institutional innovations for free trade zones are good, but more detailed measures need to be rolled out to back them up, said the 21st Century Business Herald, citing Mao Yanhua, deputy head of Institute of Free Trade Zones at Sun Yat-Sen University.

Free trade zones have become a bigger draw for foreign investors since 2013. Take the first-established Shanghai FTZ as an example. Foreign investment projects increased 1,231 during January-June, accounting for 46.1 percent of those of the whole city.

China remains a hot spot for foreign investment. Statistics from the Commerce Ministry show about 13,400 foreign enterprises set up offices in the country in the first half of this year, up 12.5 percent from a year earlier. Foreign capital actually used last year reached 441.8 billion yuan, an increase of 5.1 percent year on year.

Xinhua contributed to this story.