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2014 Business Review IX: Utilization of FDI Grows Steadily and Pace of Reform and Opening up Accelerated
  

Against the backdrop of a severe international investment environment, great difficulties and challenges from the downward pressure of the domestic economy, China鈥檚 overall absorption of FDI remained stable in 2014, with the quality of FDI utilization being further improved.

The amount of FDI utilization remained stable with the quality being improved. Firstly, the size of the FDI grew steadily. The actually utilized FDI stand at US$119.56 billion, up 1.7% year on year. At least 23,778 foreign-invested enterprises were approved, going up 4.4% year on year, revising the tide of decline in two successive years since 2012. Secondly, investment from major countries and regions maintained steady growth. In 2014, the actual FDI in the Chinese mainland from top 10 investors (Hong Kong, Singapore, Taiwan, Japan, the ROK, the U.S., Germany, the UK, France and the Netherlands) amounted to US$112.59 billion, taking up 94.2% of the total, going up 2.7% year on year. Among others, the investment from the ROK and the UK grew rapidly and registered US$3.97 billion and US$1.35 billion, going up 29.8% and 28% respectively. Thirdly, the industrial structures were further optimized and service sector鈥檚 competitiveness in introducing the FDI got strengthened. In 2014, a total of 15,800 newly-set foreign-funded enterprises in service sector were approved and the actually utilized FDI registered US$66.23 billion, going up 14.8% and 7.8% respectively, with its percentage increasing to 66.4% from 55.4%. Fourthly, actually utilized FDI in central China grew rapidly. In 2014, the actually utilized FDI in central China registered US$10.86 billion, going up 7.5% year on year.

Reforms on the foreign investment management system were promoted steadily. Active efforts were made to advance Guangdong province鈥檚 liberalization of trade in service to Hong Kong and Macao, excluding restrictive measures retained in the agreement, a filing system was applied when service providers from Hong Kong and Macao made an investment in Guangdong province, or set up a company or any alteration in the contract and articles approval. A paid-in system on registered capitals of foreign-funded enterprises was changed into a subscribed capital system and the Notice on Improving the Administration of Foreign Investment Review was issued to support the work. Ratification items on confirming the encouraged foreign investment projects were canceled and work was done to simplify filing procedures for foreign investment in macro-controlled industries and the real estate industry. We worked with the SCOPSR to carry out the pilot work on regulating and optimizing foreign investment approval, shortening the approval time, simplifying declaration procedures and documents and improving the approval efficiency remarkably. Active efforts were made in China (Shanghai) Pilot Free Trade Zone to conduct the pilot reform on the foreign investment management system, guide the zone to perfect foreign investment filing work and strengthen the under- and post-event regulation.

The pace of opening up was quickened. Efforts were made to further opening up in various fields and work in three aspects was mainly done in 2014. Firstly, we worked with the National Development and Reform Commission to revise the Catalogue of Industries for Guiding Foreign Investment, relaxing the restrictions on foreign shares, reducing restrictive items and increasing transparency by large margins. Secondly, work was done with relevant departments to study and issue documents on expanding opening up in medical care, elderly service, e-commerce, education and commercial logistics. Thirdly, active efforts were made to advance the opening up of the service sector under the CEPA framework, with Guangdong province basically realizing its liberalization of trade in service to Hong Kong and Macao. Fourthly, the China (Shanghai) Pilot Free Trade Zone was guided to further shorten the negative list of foreign investment within the zone and the number of items of the special management measures for foreign investment access was reduced to 139 in the 2014 version from 190 in the 2013 version.

Efforts were made to promote the transformation, upgrading and innovative development of the national economic and technological development zones. On the occasion of the 30th anniversary of the establishment of the national economic and technological development zones, we held a work conference on the national economic and technological development zones nationwide. The State Council issued Some Opinions on Promoting the Transformation, Upgrading and Innovative Development of the National Economic and Technological Development Zones, making clear the national economic and technological zones鈥development orientation, main tasks and policy measures in the new period. Great efforts were made to enhance the international cooperation on energy conservation and environmental protection, and we have signed MOUs with France, Italy and Finland respectively, advanced to build five ecological parks for international cooperation including the China-France Shenyang Ecological Park and work on the indicator system construction of ecological parks for international cooperation was done, with a reference guide drafted. The talents training work was given greater support to improve the comprehensive quality and management level of staffs of the national economic and technological zones.

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