Beijing: finicky about FDI

Beijing is becoming increasingly particular about foreign investment.

From Saturday, the Chinese government will no longer encourage foreign investment in certain export-oriented manufacturing industries. It may be a move designed to allay the fears of other World Trade Organization (WTO) members, who have accused China of threatening fair trade and the economic interests of other countries. The move may also address Beijing's growing trade surplus and foreign exchange reserves. 

The new regulations -- announced recently in the Catalogue of Industries for Guiding Foreign Investment (2007), a legal guide for foreign investment and imports issued by the National Development and Reform Commission (NDRC) -- will also make it harder for foreign firms to enter other sectors that Beijing is trying to rein in.

It is a motley list: foreigners will also be prohibited from investing in some energy and mining projects, news websites, internet cafes, small and mid-sized refineries, and golf courses. On the other hand, China will give foreign investors greater access to the financial sector by allowing them to take part in the futures market, an area currently closed to foreign funds.

Complaints about investment barriers are likely to be on the agenda at the US-Chinese Strategic Economic Dialogue in mid-December, led by Chinese Vice Premier Wu Yi and Henry Paulson, the US Treasury secretary.