Transition from a local basis to a systematic policy approach. The provinces should innovate institutional mechanisms to further improve and develop the administrative, judicial, market and cultural environments, and give prominence to the building of government and business integrity so as to "attract, reassure, serve and protect investors with good will, credibility, quality and rule of law."

Transition from a less-organized approach to a well-organized one, by designing promotion packages consistent with international practices; preparing brief and standard brochures; implementing business-to-business, themed, professional, industry chain-related, network-oriented and group-based investment promotion tactics; and launching featured promotion for key projects.

Transition from a solely result-based approach to a cost-conscious one, through conducting scientific assessment of promotion performance, outcome and resource utilization efficiency; reinforcing regulation over investment promotion bodies; adjusting goals, strategies, plans and resource distribution when problems are detected, to avoid further losses and damages to the promotion work; and creating effective incentives.

In addition, the responsibilities of government bodies should be specified, and financial support strengthened. Local governments should provide investment promotion bodies with financial support to cover the costs incurred in the process of promotion and in human resources training; establish a range of technical service agencies to provide institutional guarantee for efficient implementation of promotion plans.

(V) Shape a better regional image

Being less open than the coastal areas, the central region should step up publicity efforts to project a good image to the outside with cost-effective means. Success will hinge upon a number of factors, including positioning by the state and media report, apart from its own economic development profiles and local government behavior.

Chief among all tasks of image-branding are changing the mentality and government functions, and improving the environment for social and economic development. Bearing in mind the importance and necessity of a great social and economic profile for attracting foreign investment, the central provinces—especially the central cities of this region—should take measures to augment their regional features and project modern and unique city images.

As a second step, awareness-raising and publicity campaigns for the investment promotion endeavors should be launched to ensure all sectors and enterprises have a better understanding of the promotion work being undertaken and contribute their input accordingly, and help foreign investors have a clearer picture of the investment environment, policies and opportunities available in the central provinces.

To forge the central region into an investment destination with the greatest potential entails planned image-branding actions involving general and in-depth publicity via newspaper, magazines, radio, TV, Internet and other media channels. Beyond that, professional foreign bodies should be engaged to help promote the image of central China across the globe, and get the world to know more about this region.

IV. Investment Climate

(I) Improve investment environment

The investment promotion effort is one that involves business-friendly policies, mechanisms, service platforms and environment, all of which are necessary conditions for attracting industries that are moving inwards, and slashing transaction costs, otherwise the industrial transfer won't happen. It is a long-term priority for promotion agencies in the central region to expand the room for industrial development as well as to provide investors with standard investment services and sound business environments.

Central provinces should make efforts to build an integral, sound, effective, and safe investment environment, as a key link for further opening-up.

The provinces should create a liberal policy environment, a clean and efficient administrative environment, a trustworthy and fair market environment, and a fair and just legal environment, and a harmonious cultural environment, and strive to realize a transition in investment promotion from mainly resorting to offering preferential policies to creating a sound holistic environment.

The governments should standardize their behavior, improve service quality, and innovate management mindset, so that foreign-funded enterprises can enjoy the same level of administrative services that they receive in the coastal areas. On one hand, the attention to details is required to provide business-friendly and considerate services, including facilitations for business visits, information-sharing and market research, at every stage. Minimized costs for investment, decision-making and operations are greater attraction to foreign capital and will boost the potential investors' confidence. On the other hand, a transparent and efficient administration environment should be created to better serve foreign investors, including through reinforcing coordination between departments, enhancing customs clearance environment and efficiency, and establishing a safeguard mechanism for efficient administration. Mechanisms for accountability, service commitment, once-for-all notification, limited-hours settlement, and complaint accountability should be further put in place in the central region so as to improve the administrative efficiency of government departments.

Aftercare services for enterprises that have settled in the region must be properly addressed to support their development. Any practice that disrupts the business operation and infringes upon investors' interests, a lack of good faith, or random law enforcement by government bodies for instance, must be completely rectified. The coordination and complaint handling functions of foreign investment service centers should be strengthened to address disputes and complaints.

Investment promotion agencies should constantly study and predict investors' up-to-date needs for investment environment and the changing trends of evaluation standards in order to pursue better investment environment.

(II) Build a stable and transparent foreign capital administration system quickly

To build a foreign investment administration system consistent with the requirements of the market economy and international rules is also vitally important for improving the promotion work. With the development of the marketization, the administration function of government departments is also being reinforced. However, conflict of interests between competent departments has hampered the administration efficiency. As a result, breakthroughs are hard to come by in the current promotion work.

Regional development is all about regional integration, which boils down to institutional integration. Without a sound institutional mechanism and policy environment, there can be no correct orientation and effective incentive for investment promotion activities. To accelerate the formation of a stable, transparent foreign capital management system, a fair, foreseeable policy environment and standardized and simplified procedures are essential for following up on promotion plans and improving outcomes.

(III) Improve supporting policies and services

Efforts must be made to reinforce support for the competitive industries in the central region, including giving preferential treatment to the central region in terms of geological arrangement of major projects. In other words, locating in the central region major industrial projects that are consistent with state industrial policies; and providing businesses with policy credits to help them bring in key technologies and equipment, and reducing the proportion of the capital for key projects after approval.

The central region must further build the capacity for accommodating incoming industries from abroad and the coastal areas; establish industrial transfer demonstration zones in the state-level and mature province-level economic development parks and provide these zones with discounted government loans for infrastructure construction. Attention should be paid to attracting quality investment projects, especially the high-end ones with high added-value, high ripple effect, and low energy consumption through policy incentives and guidance, so as to push forward the industrial upgrading.

The provincial and cities governments should fully support the investment promotion work in accordance through establishing an investment promotion joint conference system to collect inputs from all relevant departments, regularly study the major items on investment promotion and address problems and issues that arise in the materialization process of investments.

Provinces and cities should establish investment promotion associations with the membership consisting of international investment institutions, well-known international business associations, multinational corporations, domestic investment promotion agencies, foreign-invested enterprises and government departments; hold regular events to enhance understanding and cooperation, and information collecting and sharing between investment promotion bodies, and host training programs to provide the government with suggestions on policies and strategies.

(IV) Provide financial and human resources support

Without sufficient input, there won't be sustainable momentum in the promotion activities. The central region should be generously supported financially by the central and provincial governments, including setting aside a larger proportion from the Central Foreign Trade Development Fund.

Staff training is an important guarantee for improving the investment promotion activities, techniques and skills. In this context, the existing resources should be consolidated, and government support and guidance strengthened to develop a team of professionals familiar with operational procedures and methods of investment promotion work, including job rotations to the coastal areas. Experts and consultant groups should be closely engaged to provide investors with a full range of professional services before and after the investment is made. Governments at all levels should designate dedicated civil servants who are familiar with economics and policies and proficient in foreign languages to the forefront of investment promotion work.

(V) Build a sound evaluation and supervision system

The evaluation system, mechanism and incentives for foreign investment promotion, as well as investment environment evaluation and accountability systems must be improved from the perspectives of technical contents, economic and social relevance and contribution to sustainable development of projects.

The Ministry of Commerce will, together with relevant departments, strengthen tracking, analysis and supervision of the implementation of the Plan; organize interim evaluation of the implementation; and make flexible adjustments where appropriate, to ensure the effective execution of the Plan.

Comprehensive evaluation of work efficiency, service quality, law enforcement, policy follow-up, and handling of complaints filed by foreign investors should be conducted, with the results made public through the media on a yearly basis at the provincial, city and county levels. An accountability system, where awards are granted on the basis of merits, with poor performing departments subject to disciplinary actions, should be put in place in order to guide government departments to shift their focus from quantity to quality in foreign investment promotion.

Source: www.fdi.gov.cn