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City raises district FDI ceiling in drive for economic growth

SHANGHAI will allow district governments to approve more foreign direct investment projects as part of its efforts to increase overseas spending in the city.

Starting from August 1, district governments can approve FDI projects of up to US$100 million, compared with US$30 million now, the Shanghai Commission of Commerce said yesterday at a media briefing.

The city plans to ease rules on the approval of special foreign-investment projects, such as mergers and acquisitions, by the end of this year.

Shanghai's FDI tumbled 37.4 percent in May from a year earlier - compared to the fall of 18.3 percent in April - as a result of the global financial crisis.

The city government has launched efforts to attract foreign capital, including subsidies, benefits to logistics, and research and development aid to multinational corporations.

Sha Hailin, commission director, said: "Preferential policies and convenience for better operations of foreign enterprises will help them to develop, thus leading to stable economic growth."

In the first quarter, Shanghai's economic growth slowed to 3.1 percent after posting a 9.7 percent expansion last year - the first single-digit rise in 17 years.

The commission yesterday granted certificates to 16 regional headquarters of multinational corporations.

Included are Chrysler Asia-Pacific Investment Co and American Standard Asia Pacific Management Co. It brought the number of regional headquarters, investment arms and research centers of multinationals in Shanghai to 707.

Sha said the number of regional headquarters would provide an economic lift.

An official from the China investment operations of tire and rubber company Bridgestone Corp said the company chose Shanghai as the city had well-developed infrastructure, convenient transportation and bright development prospects.

The number of FDI contracts in the city retreated 20.7 percent from a year earlier to 256 projects in May, according to the Shanghai Statistics Bureau.

Of these, 231 projects, valued at an overall US$645 million, went to the services sector, accounting for 64.3 percent of the total value,

Analysts have suggested the city continue to enhance its advantages by luring investments in the services and advanced technology industries, which create more value and are eco-friendly.


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