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Foreign firms to list in China

FOREIGN direct investment in China faces "unprecedented difficulties" amid the global financial crisis, which is making foreign investors hold back on spending, Vice Commerce Minister Chen Jian said yesterday.

To stabilize the flow of investment, the government has been working on a plan to allow foreign companies to be listed on the Chinese mainland.

"We will continue to work with other departments on policies regarding domestic initial public offerings of foreign firms," Chen said during a briefing at the 13th China International Fair for Investment and Trade in Beijing.

The volume of FDI in China dropped 17.8 percent from a year earlier in May to US$6.4 billion, although contraction momentum has softened from the decrease of 22.5 percent in April.

"The declines, which stretched for eight straight months, have become the worst scenario since the Asian financial crisis," said Chen.

However, he remained optimistic, saying that China's stable political status and good business infrastructure added to its strengths.

"Although China faces unprecedented difficulties and challenges in attracting FDI, China's political situations remain stable, and the long-term trends for its economic development have not changed," he said.

In response to the falling FDI, China will provide better support and enhance government efficiency to reverse the decline, the ministry said in a report last month.

The government will conduct an overall check of administrative procedure to better regulate the process.

To help foreign companies raise funds, the government will also improve financial services and accelerate research into allowing foreign-incorporated enterprises to be listed on the mainland.

Meanwhile, the volume of China's outbound investment also fell in the first half, Chen said. Cases of China's outbound investment grew 7 percent to 445, but most were small in value which led to a cut in volume.


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