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November 09, 2006

China Seeking Value Added Investors

posted by MR WAVETHEORY at 11/09/2006 06:17:00 PM
China outlined a new approach to foreign investment, with planners saying they will now focus less on attracting large amounts of cash and more on selecting investments that will lure valuable skills and technology into the country. Firms from around the globe poured more than $70 billion into China last year, drawn by its low costs and huge domestic marketplace. But the flood of cash from abroad has awakened some unease among citizens and policy makers who also want domestic enterprises to prosper. The new plan is a statement of principles, not a blueprint, but it promises that regulators will look more closely at foreign takeovers of local companies and other issues of "national economic security." The plan said China would continue to open up service industries like banking and retailing, though it offered no new specific commitments.

Did they get a private equity guy to write this statement? It sounds like something straight out of a venture capital / private equity fundraising document.

The planning agency said its major goal is to advance what it calls a "fundamental shift from quantity to quality" of investment. For instance, new investments by foreign companies will face stricter environmental and land-use standards, in an effort to weed out projects that use up scarce resources without contributing much to the local economy. On the other hand, multinationals can expect incentives to invest in things such as research centers and training and purchasing operations.

"We will strive to realize a shift by foreign investors away from simple processing, assembly and low-level manufacturing and into research and development, high-end design, modern logistics and other new areas," an unnamed commission official said in a statement accompanying the plan. "This will help our country become one of the world's manufacturing bases for high value-added products."

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Anonymous Anonymous said...

A broker in commodity based derivatives working mainly with financial counterparty will have less issues implementing the directive. Their business is basically a Los Angeles business investment business and some of the principles behind the details of MiFID and CRD clearly apply to them.

1:12 AM  

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