During the fair held in east China's Xiamen city, one of China's five special economic zones, State Councilor Wu Yi told participants that China is entering another phase in absorbing foreign funds.

And Shi Guangsheng, minister of foreign trade and economic cooperation, said China is trying to induce foreign capital to the mid-west regions, to industries of technological development, mechanical and electronic parts, and to the reform of state-owned enterprises.

The Chinese government decided early this year to open sectors including finance, insurance, stocks, telecommunications, tourism to foreign investment, so it's likely that more foreign capital will be injected into agriculture, infrastructure, energy, environmental protection and other service industries.

All these, analysts said, have reflected that China is introducing a new "quality counts" philosophy in attracting foreign investment.

Taking this into consideration, analysts pointed out that China will be more selective in attracting foreign investment.

The availability of cheap labor and raw materials will no longer be as important as they used to be in deciding projects for foreign cooperation, they said.

Instead, China hopes to bring in foreign capital to some pillar industries that will sustain the country's economic growth.

Ma Xiuhong, assistant minister of foreign trade and economic cooperation, referred to the change as "a change of thought," which brings the absorption of foreign funding into the orbit of globalization.

In another development, China is making efforts to gain an advantage in absorbing funds, as experts have suggested that the low competitive ability of Chinese enterprises has prevented themselves from attracting foreign partners.

China has adopted new methods in attracting foreign funding, including stocks, bonds, and BOT items.

As for industries that will face toughest challenges after China's accession into the World Trade Organization (WTO), like information technology, engineering, and petro-chemicals, China has established a number of groups of global competitive ability, which are expected to be in a better position to absorb foreign funds.

China has also encouraged potential companies to go public abroad in search of investment.

For the past seven years, China has taken in the largest amount of foreign capital among developing countries.

(Pepole's Daily)