China has opened more sectors to foreign direct investment (FDI) as foreign investment flows into the country showed signs of a decline for the first time last month.

he National Development and Reform Commission and the Ministry of Commerce jointly issued new guidelines to encourage more foreign investment in energy-saving and environment-friendly technologies, new-generation information technology, biotechnology, high-end equipment manufacturing, alternative energy, advanced materials and alternative fuel cars.

The guidelines will come into effect on January 30, 2012.

China will cut down restrictions on foreign investment by allowing overseas players to invest in more sectors while lifting caps on the proportion of foreign capital in some sectors, according to the new guidelines.

The grim global economic scenario affected FDI inflows to China for the first time as it registered a 9.76 per cent decline in November to $8.76 billion.

The November figure took total FDI into China in the first 11 months to $103.77 billion, up 13.15 per cent year-on-year.

FDI flows from the US dropped 23.05 per cent year-on-year to $2.74 billion in November.

The new guidelines said the Government will continue to welcome foreign investors in high-end manufacturing and modern service industries.

It also encourages them to invest in recycling industries, state-run news agency Xinhua reported.

However, the Government will withdraw support for foreign capital in auto manufacturing because of the need for healthy development of domestic auto manufacturing capacities.

It will not support foreign investment in the polycrystalline silicon and coal chemical sectors due to concerns of industrial overcapacity and repeated construction, according to the guidelines.

In light of regional development gaps, the government will roll out a finetuned policy for the central and western regions in the future, the report said.

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