China will continue to work with other countries to promote and facilitate the flow of cross-border investment, officials said at the 16th International Fair for Investment and Trade in southeast China's Xiamen City.
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"International investment is a major driver for global economic growth. We should work together to fight protectionism and remove barriers to create a better environment for business investment," state councilor Ma Kai said.
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Weighed by the weak growth of the economy, which slowed to a three-year low of 7.6 percent in the second quarter, foreign direct investment has fallen this year.
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Ministry of Commerce data showed that the total FDI for the first seven months of the year came in at US$66.67 billion, down 3.6 percent year on year, with investment from the debt-plagued European Union down 2.7 percent year on year to US$3.97 billion.
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Meanwhile, recent reports about foreign businesses planning to leave China due to rising labor and material costs have added to concerns that foreign capital is rapidly leaving China.
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A recent report released by the US Chamber of Commerce and AmCham Singapore showed that 21 percent of US companies plan to shift part of their investment or operations in China to southeast Asian countries in the next two years due to rising costs.
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"This could be a problem for China, as foreign investment brings capital and new technology to China. The Chinese government should modify its policies to attract more foreign capital," said Robert Mundell, the Nobel Prize-winning Canadian economist known as the "father" of the euro.
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He said China should lower corporate tax rates to ease burdens on businesses and offset the rising cost of labor and materials.
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Gao Hucheng, vice minister of commerce, said China will encourage foreign capital to enter the country's modern agriculture, high-end manufacturing, new technology, new energy and service sectors.
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The government will also guide foreign capital toward the less-developed middle and western regions and improve regulations to create a fair and transparent environment for foreign investors.
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Ma also urged foreign investors to engage in the restructuring of state-owned enterprises through mergers and acquisitions.Â
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China will continue to work with other countries to promote and facilitate the flow of cross-border investment, officials said at the 16th International Fair for Investment and Trade in southeast China's Xiamen City.
