To fully utilize the domestic and the foreign markets and resources, speed up the strategic reconstruction of the municipality's industry, and realize the gradual shifting of the market of the municipality's industry to overseas, and maintain a rapid, sustained and sound economic development, efforts should be made to further enlarge outbound investment, develop multinational operation, and explore the international market. Hereby, the following suggestions are put forward:

1. Guiding principles
In the coming years, Shanghai shall, guided by the demand of market, basing on the real situation of its industry and technology, concentrate the limited capital so as to further promote its overseas investment steadily with focuses and definite aims.
(1) With regard to the investment regions, enterprises should base themselves on South Africa, and then investment may be expanded into a larger region including the countries located in the southern part of Africa, West Africa, and North Africa. Enterprises should also increasingly enlarge their investment in Southeast Asia, and meanwhile choose with care to invest in regions like central Asia, east Europe, and Latin America.
(2) With regard to the fields of investment, enterprises should choose industries like textile processing, household appliances, medicine, food, and machinery as breakthrough, and later on expand progressively into electricity, and chemical industry. At the same time, enterprises should seek opportunities to invest in resources and trade projects.
(3) With regard to the scale of investment, enterprises should begin with adaptive, efficient, equipment export oriented production projects of small scale, and of industry with fully developed technology
(4) With regard to the mode of investment, the aim in these recent three years is to develop step by step the direct investment. Enterprises should strive to establish indirect investment as well as enlarge direct investment from the year 2000 to 2010.

Ⅱ.Encouraging policies and measures
1. Encouraging policies and measures at present only applicable to projects invested in countries located in the southern part of Africa.
(1) To establish Shanghai Special Fund for developing outbound investment.
The Fund will start running with the first sum of RMB ￥100 million provided by Shanghai Industrial Investment Holdings Co. Ltd. At present, those who may apply for loan from the fund are the enterprises from Shanghai having invested in non-trade projects in countries located in the southern part of Africa. The projects shall be the ones that have been granted approval from the State administrative authorities, and the detailed procedures shall follow the items listed in the interim Measures for the Administration of Shanghai Special Funs for developing outbound investment.

(2) To provide experimental insurance service against political risk
PICC Asset Management Co Ltd, Shanghai Branch shall provide pilot political risk insurance to Shanghai enterprises investing directly in the countries located in the southern part of Africa, by consulting the articles of such service provided to overseas investors. Political risk insurance covers the coverage included in war-risk insurance, insurance against confiscation and expropriation and the insurance against inability to convert local currency and repatriate profits, among which enterprises investing abroad may buy with selection.

2. Encouraging policies and measures at present applicable to projects invested in countries located in Africa.

(1) Financial departments shall provide discounted loan interest subsidy
Projects invested in Africa received special support from the municipal government may receive discounted loan interest subsidy from the financial department. Projects that belong to districts, counties or Pudong New Area, will receive most of their discount loan subsidy from the Finance Departments of their local district, county or area, and the rest small part from the municipal finance in line with the principle of "share between the two levels of Finances". Normally the rate of discounted loan interest subsidy shall not exceed 50% of the interest rate of the loan. The interim Measures for discounted loan interest subsidy to projects invested abroad shall be consulted concerning the details in operation.

(2) The income of the enterprises' resident staff in African countries should be raised
Raise appropriately the basic salary and regional subsidy of the enterprises' resident staff in African countries according to the actual situation of different enterprises and appropriate income gap shall be allowed in view of their separate post and contribution.

(3) Projects invested in Africa that receive special support from the municipal government may temporarily postpone handing in profit guaranteed deposit.
Non-trade projects receiving special support from the municipal government, in case they do have difficulty in handing in profit guaranteed deposit, may postpone it, when receiving the approval from the State Foreign Exchange Bureau, Shanghai Branch after they have presented guaranty of remitting profits regularly and an application for temporarily postpone profit guaranteed deposit.

(4) The enterprises should be helped to land the RMB funds they need for the project
For those projects receiving special support from the municipal government, loan for operating funds with comparatively longer term and more preferential policies may be granted according to the needs of the enterprises within the permissions of relevant regulations after the negotiation with relating commercial banks.

3. Measures to encourage outbound investment
(1) The process in examining the risk and source of foreign exchange of the overseas investment should be sped up.
Before receiving application materials from enterprises, the State Foreign Exchange Bureau, Shanghai Branch shall provide consultancy and remedial instructions. For the overseas investment projects with the capital from the Chinese part not exceeding US$1 million, State Foreign Exchange Bureau, Shanghai Branch shall, after receiving all the required materials, issue the letter of opinions on the risk of remittance and resources of foreign exchanges of the overseas investment in line with the spirit of special treatment to special matters.
(2) The procedures of examination and approval of going abroad should be reduced.
In case when relevant person is going to the countries having established diplomatic relations with China, the approval documents should be issued as soon as possible in principle.
In case when relevant person is going to countries not having established diplomatic relations with China, the procedures should be handled as individual cases according to the practical situation.
(3) The training of the enterprises' resident staff should be enhanced
Before the resident staff (staying overseas for more than two years) goes abroad, trainings in the fields of foreign languages, finance, management, laws and regulations should be received. The Municipal Foreign Economic Relations and Trade Commission will organize the training.
The resident administrative staff shall return to report their work and receive short term training annually.
Ⅲ. Organization and implementation
1. To set up the working panel of Shanghai outbound investment
The working panel of Shanghai outbound investment shall be made up of members from the Municipal Foreign Economic Relations and Trade Commission, Shanghai Industrial Investment Holding Co. Ltd, Shanghai Audit Bureau, Shanghai Economic Commission, Shanghai Commercial Commission, Shanghai Finance Bureau, the People's Bank of China, Shanghai Branch, the State Administration of Foreign Exchange, Shanghai Branch, and PICC Asset Management Co Ltd, Shanghai Branch. The major duty of the working panel is to coordinate and promote relevant matters and work of the key investment regions, examine and recommend non-trade direct investment projects which have applied for loans or discounted interest subsidy and issue specific recommendation letters for those projects applying for temporary postponement of profit guaranteed deposit.
2. To reinforce the management and coordination of foreign economic and trade cooperation abroad
According to actual needs, the municipality will set up many representative offices abroad to reinforce the management and coordination of foreign economic and trade cooperation overseas. The representative offices will be set up under the regional headquarters of Shanghai Industrial Investment Holding Co. Ltd, and the Municipal Foreign Economic Relations and Trade Commission shall send the working staff.