China’s Eleventh Five-Year Plan on Use of Foreign Investment (17/04/2007)
1. What is a five-year plan?
By summarizing the overall picture of the use of foreign investment in China during the tenth five-year period (i.e. the 2001-2005 period) and analyzing the prospective domestic and international economic environment for the eleventh five year period (i.e. the 2006-2010 period), the Plan brings forward the guidelines, strategic targets, important missions and corresponding policies on the use of foreign investment during the eleventh five-year period. The Plan provides essential guidance to those likely to be involved in foreign investment in China in the eleventh five-year period.
2. What does this plan entail?
According to the Plan, during the eleventh five-year period, China will shift its focus from contending with a shortage of funds and foreign exchange to introducing advanced technologies, management experience and high-caliber personnel, with the aim of significantly altering China’s focus on quantity of foreign investment to quality. It is intended that China will strive to expand the fields into which foreign investment is permitted. Previously, foreign investment has been limited to the fields of simple processing and assembling and low-level production and manufacture. China intends now to encourage foreign investment into such new fields as research and development, high-end design, and modern communications so that China might advance to become one of the world’s key manufacturing bases for high added value products and also so that China might further open up its service industries.
In addition, through the introduction of foreign advanced technologies and management skills, foreign-funded enterprises will be given chances to lead and bring along Chinese enterprises so as to improve their independent innovating ability. With these aims in mind, the Plan identifies eight major missions and lays down eight key policies on the use of foreign investment for the
eleventh five-year period.
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