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'Unprecedented difficulties' for FDI

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 today.

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

"We will continue to work with other departments on policies regarding domestic initial public offerings of foreign firms," said Chen 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 with declines posted for eight consecutive months although the 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.

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

The government will carry out a check of administrative procedures to better regulate the process, cut unnecessary fees and reduce unnecessary steps in the procedure.

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


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