China will maintain its current favorable policies towards foreign investment, Chen Jian, assistant minister of commerce, said in Beijing on Tuesday at a press conference.

Giving foreign-funded enterprises special treatment is a common practice that is widely used by both developed and developing countries, said Chen, adding that China's favorable policies now are not so attractive compared with those implemented by neighboring countries.

"China should ensure that its current policies are sustained and stabilized, as the country faces a resource shortage problem and a rising cost of labor," the official said.

"Attracting foreign funds is not only a capital issue," he said, "it can bring advanced technologies and management mechanisms."

"Now is the chance for China to join the new world economic order and integrate with the global economy," Chen said, "China cannot afford to lose the chance."

As for the long-disputed unification of the income taxes on domestic and foreign-funded enterprises, Chen said that tax collection is an important means in adjusting economic development. The purpose is to promote the healthy development of the national economy.

Giving foreign-funded enterprises special treatment is not against the rules of the World Trade Organization, he added.

(China Daily July 13, 2005)