Chinese government will gradually scrap restrictions on the destination, stock ownership and business scope of foreign investment in the service sector, a senior economic planner said here Saturday.

"China will stick to the open-up policy and promote a quantity-to-quality transformation in attracting foreign investment," said Zhang Mao, vice minister of the National Development and Reform Commission (NDRC).

According to the vice minister, existing restrictions on foreign investment in key industries concerning China's national security and people's livelihood will remain unchanged.

"The point (of the transformation) is to absorb advanced technologies and management skills from foreign countries," he said, "and foreign investment companies are expected play a positive role in this regard."

The vice minister told a multinational CEO roundtable Saturday that foreign investment would be encouraged to enter high-tech, equipment and new material manufacturing and logistics. The central and western hinterlands are open for foreign investment with more incentives.

But he stressed that foreign investors are restricted from setting up businesses for export only in China and banned from creating polluting projects and those relying on consuming too much energy and resources, Zhang said.

The authorities will help create a sound investment environment by simplifying examination and approval procedures and steadily accelerate free exchange of the Chinese currency under the capital account, said the vice minister.

The government would establish a cross-department supervision mechanism over foreign mergers and acquisitions, in an effort to safeguard national economic security, he said.

Source: Xinhua