The Chinese government is considering the public listing of foreign-invested enterprises on the Chinese stock market as part of a new scheme to attract overseas investment. This is the first foreign investment policy adjustment by the government in reaction to such investment having declined for the past eight straight months.

The scheme, formulated under the leadership of the Ministry of Commerce (MoC), is nearing completion. The new policy will focus on structural adjustment and boosting employment, regional development, and energy-saving.

Taxes from foreign-invested companies generally account for around 21% of China’s total tax revenue, and their exports and imports account for 55.3% and 54.7%, respectively, of China’s total. About 15 million people are directly employed by foreign-invested companies. The constant decline in FDI and the consequent decline of those numbers are forcing policy makers to pay attention and formulate policies to try to bring them back up.

The new policies are particularly aimed at foreign investment in high-tech industries. The MoC will also guide foreign capital to advanced manufacturing, energy-saving, and modern service industries. It will also encourage foreign investment in agriculture and the deep processing of agricultural products, which will help increase farmers’ incomes and introduce modern agricultural technology and management model into the area.

Vice-Minister of Commerce Chen Jian said the ministry would also promote good foreign invested companies to list on overseas markets at a proper time.

The MoC is being very chary, however, about real estate, which has been attracting a lot of outsider attention. Officials say that due to the sensitive nature of the industry, MoC was very cautious in letting foreign investment into this area.

In 2006 and 2007, the State Administration of Foreign Exchange (SAFE) reinforced regulation over foreign-invested real estate enterprises jointly with other government departments to prevent foreign capital from over-boosting China’s real estate market.

Some changes have occurred, though, to the approval procedures of foreign-invested developers. SAFE recently released a notice, according to which its branches and banks designated to operate forex business will be able to check the list of foreign-invested real estate companies registered with the MoC on MoC’s website and deal with their registration and foreign exchange settlement.