China's Investment Environment is Improving

Google's possible pull-out of China has led to criticism that the country's investment environment is worsening for foreign enterprises.

But many scholars argue that the investment environment is improving and still attractive after 30 years of reform and opening up. He Fei has the details.

International search giant Google has threatened to withdraw from China and accused the country of having a deteriorating investment environment.

Zhou Shijian, a researcher from Tsinghua University, says China has actually become an increasingly important target of overseas investment. And it's Google rather than China's investment environment that will suffer from the pull-out.

"During the worst period of economic crisis in 2008, many Western enterprises transferred their businesses to China to make up for their tough times in their home countries. If Google finally withdraws from China, it will benefit other Internet companies with no gains for itself."

Google entered the Chinese market four years ago after making a written promise to filter the search service according to Chinese laws and regulations.

But, now the company has broken that promise and provided uncensored search results for online visitors in China.

Huang Weiping, an economist with Renmin University of China, says Google's dishonest move can't change the fact that China's investment environment is maturing.

"After three decades of reform and opening up, the social credit system has formed among both enterprises and individuals. I believe that the emergence of the credit system is very good news for foreign companies. In short, I think China's investment environment is improving rather than worsening."

Huang Weiping adds that other multinationals can learn a lesson from the Google incident.

"When enterprises invest in another country or place, they should be aware of and adapt to the legal and market environment there. If a foreign company wants to change the local legal environment by imposing its own business standards, no country can tolerate this."

The economist is very optimistic that China will continue to attract foreign investment.

"Under the circumstances of globalization, opening to foreign investment will bring about transfers of industry, technology and management expertise. This kind of opening up is very good for China's development. I firmly believe that China has no reason to fend off foreign investment."

Currently, 660,000 foreign-funded enterprises are tapping a booming market in China. And nearly all of the Fortune 500 firms are reaping the fruits of China's rapid economic growth.

During the first two months of this year, China has received over 14 billion U.S. dollars in actual foreign investment, an increase of five percent year on year.

And China has overtaken Great Britain as the world's second largest receiver of foreign investment.

He Fei, CRI news.