A European Community commissioner has urged China to make it simpler and more profitable for foreign companies to invest. Abel Matutes, the EC commissioner for credit and investment, said that only $7.7 billion of the $21.7 billion that foreign businesses planned to invest in China from 1979 through September, 1988, had been spent.
More favorable conditions to ensure a successful operation of joint ventures have yet to be created in China, he said. Tax and legal systems should be made more uniform, and foreign and Chinese firms should be treated equally, he added.
"If they have to operate at a disadvantage compared to Chinese firms, particularly for access to factors of production, whether material or human, if they see they cannot earn a reasonable profit . . . they will lose interest," he said.
Most foreign investment in China comes from Hong Kong companies, with Japan a distant third after the United States.