Chinese Vice Premier Wu Yi speaks at the Symposium for Multinational Corporations during the 10th China International Fair for Investment and Trade (CIFIT) in Xiamen, a coastal city in southeast China's Fujian Province, Sept. 7, 2006. (Xinhua Photo) Photo Gallery >>>

    BEIJING, Sept. 7 (Xinhua) -- While China still welcomes all forms of foreign investment it will open up its arms wider to investors who have advanced technologies to offer, Chinese Vice Premier Wu Yi assured representatives of multinationals at a symposium on Thursday.

    She told the business executives that foreign investment must serve the needs of China's industrial restructuring.

    The Industry Guide for Foreign Investors will undergo its third revision since 1997 in the hope of channeling more investment into research and development centers, new high-tech industries, advanced manufacturing, and the energy conservation and environmentally friendly sectors, said Wu, who chaired a seminar at the symposium held in Xiamen, east China's Fujian Province.

    Investment that helps upgrade China's agriculture, service industry and traditional manufacture will also be encouraged, she said.

    Although China has been the largest recipient of foreign investment among all developing nations for 15 successive years, there is much to be done to improve both its quality and quantity, Wu noted.

    She cited a report to the UN Conference on Trade and Development, that noted in 2004 China attracted per capita foreign investment of 47 U.S. dollars, much lower than the 534 U.S. dollars per person that was invested in developed countries and below the world average of 107 U.S. dollars.

    Jin Bosheng, a research fellow with the Research Institute of the Ministry of Commerce, said that China is showing particular interest in new high-tech industries especially electronics, biology, petrochemical and medicines.

    Such changes indicate that China is seeking to redirect foreign investment, he said.

    Amid growing domestic concern that surging foreign trade isn't bringing much benefit to people in central and western China, investment regulators are now focusing on upgrading industries in the poorer areas of inland China.

    Assistant Minister of Commerce Yi Xiaozhun recently revealed a plan to encourage first-generation foreign investors, whose businesses mainly focused on low value-added processing, to move to the less developed interior. East coast business centers, the original frontier of China's new economy, would then refocus its development on more lucrative high-tech industries.

    Although that plan received an icy response from foreign investors, China has revised a series of regulations on foreign investment. The latest revision involved a regulation due to come into effect on Friday, which standardizes acquisitions and mergers of Chinese companies by foreign investors.

    After a number of foreign companies recently encountered difficulties acquiring Chinese companies there's been speculation that China is considering tightening foreign investment controls.

    Vice director Guo Jingyi of the Law and Regulation Department of the Ministry of Commerce refuted the speculation, citing new rules which for the first time will allow share swapping between foreign and Chinese companies involved in mergers and acquisitions.

    "We've opened a new channel for foreign mergers and acquisitions," he said. In the past, the most popular form of foreign investment in China was factory building.

    Justin Lin, director with the China Center for Economic Research of Peking University, said that it's time China start to get picky with foreign investment.

    China's current policies of attracting foreign investment were made 27 years ago when China was desperate for money and foreign currencies.

    "While China's foreign currency reserve surged to 875.1 billion US dollars in March, the highest in the world, our priority now is not to attract as much foreign investment as possible but to bring in new high-tech industries which we currently don't have, " he said.

    "I have no doubt that preferential policies will only remain for certain kinds of foreign investors," Lin said. Enditem