Zhang added that overseas investors should locate centers for research and development, operations and logistics here in China, instead of moving their "chimneys".

Tighter controls haven't deterred investors, at least so far. China had 11.2 billion U.S. dollars of paid-in overseas investment in January, up about 110 percent year-on-year.

Philip Tong, chairman of the overseas-invested ventures' association in Shunde, a city in the Pearl River Delta, said that the rules of the game had changed. Tong, who also runs an auto parts business in Hong Kong, added: "We should be quick to learn to adapt to the changed situation."

(Xinhua News Agency March 6, 2008)