Foreign-funded enterprises’ production and operation enjoy national treatment in China, and the facilitation policies for trade and investment will continue, Liu Yajun, an official with China’s Ministry of Commerce, said on July 15.

“We still need to make good use of foreign investment, and will keep improving investment environment actively and encourage foreign investment.” Liu said.

Responding to the reports that foreign-funded companies are facing more intense competition in China, he said it was the reflection of China’s market.

He also emphasized that the Chinese government has been facing problems with the investment environment, and has taken active measures to improve it.

“Foreign-funded enterprises receive national treatment in the course of production and operation, and their rights and interests are protected by constitution and laws,” he said.

12.4 thousand foreign-funded enterprises got their certificates into national non-financial field in the first six months of this year, an increase of 18.8 percent year on year. 51.43 billion U.S. dollars of foreign capital were actually utilized, an increase of 19.6%.

During the same period, the total import-export value of foreign-funded enterprises was 728.15 billion U.S. dollars, up 40.4 percent and accounts for 53.7 percent of the country’s total import-export value.

As to the issue of hiking labor costs, Liu Yajun said this is only one part and the increase of labor costs exists not only in China. “In the aspect of attracting foreign capital, the influence of labor costs on the whole investment is just one factor.”

He also pointed out some foreign-funded enterprises in the coastal regions have been considering over transferring to China central western area before the Honda strike or the Foxconn event. Industrial transfer is always a long process. China’s central western area had much investment from foreign-funded enterprises in the coastal areas, resulting from various factors including market and local issues.

The ministry has not witnessed massive enterprise relocation, he said.

The overall investment environment of China, including market space, subsidiary industries, quality of labor force, policy environment and so on, gives China a great competitive advantage, he said. “I believe the increase of labor costs won’t affect foreign investment much.”

Source: People's Daily