Look East.....but are we learning. We push for the 51/49 ownership arrangement which has Investors scared and on the run effectively stopping all FDI into the country. Now lets learn from China. Chinas FDI in 2006 soared to $63.02 billion excluding banks, insurance and other securities, this resulted in Chinas exports increasing by 74% to a record $177,5 billion. How did China achieve this..... China allowed three types of foreign investments (1) WFOE wholly foreign owned enterprise (2) JV joint venture where the foreign partner must provide at least 25% (AT LEAST) of initial capital (3) RO representative office. FDI was further encouraged by favourable tax treatment that saw foreign investment enterprises enjoying a lower tax rate that was +/-13% lower that normal corporate tax. RESULTS: Now China is no longer desperate for FDI. So we look east but are we learning. I propose we go back to the drawing board. Categorize our industry into Critical, Strategic, Developmental, Basic etc and then look at our 51/49 with a view to revise this strategy for certain categories of industry and lure FDI.
Posted on: Thu, 06 Mar 2014 07:02:55 +0000
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