Utilizing foreign capital is the important content in China’s basic state policy of opening up to the outside world. China has positively been attracting foreign investment and promoted industrial upgrading and technical progress since the opening up, with foreign-invested enterprises being the important component of the national economy. At present, Chinese advantage over utilizing foreign capital remains obvious. For the purpose of raising the quality and level of utilizing foreign capital and better giving full play to utilizing foreign capital in boosting scientific innovation, industrial upgrading and regional coordinated and balanced development, the following opinions are hereby put forward:
Ⅰ. Optimize the structure of utilizing foreign capital
(1)?The Catalogue for the Guidance of Foreign Investment Industries shall in accordance with the economic growth of China and combining the national industrial restructuring and revitalization plan be revised to expand the open areas and encourage foreign capital to high-end manufacturing, high and new technology industry, modern service industry, new energy and energy-saving and environmental protection industry and “High-polluting, high-energy-consuming and resource-dependent” and low-level and overcapacity expansion projects strictly restricted.
(2)?The policies and measures in the national industrial restructuring and revitalization plan shall be simultaneously subject to qualified foreign-invested enterprises.
(3)?The priority of land use shall be given to the national encourage foreign-invested intense land use projects, which shall be executed based on no less than 70% of the corresponding land as prescribed in the National Standards for the Minimum Transfer Prices of Land for Industrial Purposes after confirming the minimum price.
(4)?Foreign investment in hi-tech enterprises shall be encouraged and hi-tech enterprise recognition improved and perfected.
(5)?Domestic and foreign enterprises shall be encouraged to strengthened R&D cooperation and qualified foreign-invested enterprises supported to cooperate with domestic enterprises and research institutes to apply for the national scientific development projects and innovation capability construction projects and the recognition of the establishment of the national technical center.
(6)?Transnational companies shall be encouraged to set up such functional institutes as regional headquarters, R&D centers, purchase centers, finance management centers, settlement center and cost and profit calculation centers within China. No tariffs and value-added tax and consumption tax of import shall be levied on the products for scientific development use indeed needed by qualified foreign-funded R&D centers prior to December 31, 2010. and
(7)?Supporting policies shall be implemented and perfected to encourage foreign investment in the service outsourcing industry so as to bring in advanced technologies and management experience to raise the international competitiveness of China’s service outsourcing industry.
Ⅱ. Guide foreign capital to central and west China and increase of investment
(8)?In accordance with the amendment of the Catalogue for the Guidance of Foreign Investment Industries, the Catalogue of Priority Industries for Foreign Investment in the Central-Western Region shall be supplemented to add the items of labor-intense projects and encourage foreign businessmen to develop the labor-intense industries qualified for environmental protection in the central and western region.
(9)?The preferential policies of enterprise income tax shall be continuously subject to qualified domestic and foreign-invested enterprises in the central and west China to maintain the good momentum of growth in attracting foreign investment in the region.
(10) The shift of foreign-invested enterprises in the east to the central-western regi

Source: the State Council