The process of removing the restrictions on foreign share-holding will be completed within three years after China becomes a full member of the World Trade Organization (WTO), said sources from the State Administration of Internal Trade (SAIT).

Huang Hai, an economist with the SAIT, made his remarks at the on-going fourth China Fair for International Investment and Trade, which opened in the east port city of Xiamen on September 8.

Huang said, all of China's municipalities, provincial capitals and relevant cities can set up FICEs, and foreign investors are permitted to hold shares no more than 65 percent in the FICEs provided that they run only three or less than three chain stores.

China has lifted the restrictions on the number and location of foreign-invested retail sales enterprises. And China is studying whether or not to impose restrictions on foreign investors in large chain stores and storage shops.

China's first foreign-funded retail sales store went into operation in Shanghai in 1995. So far, China has insisted that Chinese side controls the major shares of such enterprises.

A senior WTO official said that speeding up the development of service sector in China is of great importance in creating more jobs, absorbing surplus rural laborers, urbanization, taxation, and in enriching the cultural life of the public, and in readjusting the country's economic structure.

At present, China's service sector only accounts for 39 percent of the national economy, far falling behind the world's average of 61 percent.

Guo Geping, chairman of the China Association for Chain Store Management, said the inflow of foreign funds into China's retail sales and other service sectors is helpful to revitalizing the market, and is good for the development of domestic enterprises while benefiting foreign investors themselves.

China now has more than 300 FICEs, whose sales volume accounts for 3 percent of the nation's total.

(People’s Daily)