In foreign investment attraction, it is a traditional practice for the government to play a dominant role. But Shanghai has changed this practice, according to a recent report. In the city, specialized intermediate agencies now promote investment projects on related markets and, through an open, fair and strict process, select ideal cooperative partners for investment seekers. This is a good change.
　　For a long period of time, we have regarded attracting foreign investment as a government function. In some areas, government officials are given foreign investment attraction quotas. This is a mistake.
　　Government involvement in foreign investment attraction is like government running enterprises. This would result in the government having a dual status: an athlete as well as a referee. Since they have foreign investment attraction quotas, officials may abuse their power to provide extra and abnormal services in the process. At various step of the whole process, they may cut land prices, offer tax breaks and help investors evade normal inspections, in violation of rules. Some officials even turn a blind eye when investors break the law for fear that they may withdraw their investment.
　　Foreign investment attraction is a commercial activity; it is competitive in nature. Commercial activities and affairs of a competitive nature should be turned over to businesses and done in accordance with commercial rules and laws of the market. The government‘s function is to provide public services. On matters relating to foreign investment attraction, the government‘s role is to create a good investment environment and an atmosphere conducive to innovation.
　　Some investors are glad to deal with a particular government though the area under the latter‘s jurisdiction may not be a good place to invest at all. They pay no regard to commercial rules and laws of the market. Why? Because they like the power of the government. With the help (or power abuse) of officials, they can make money out of their investment. There are necessarily losers in such deals - the local people.
　　Having let the business of attracting foreign investment taken over by intermediate agencies, the government can do a better job of providing public services. Honest investors, on the other hand, like to deal with intermediaries since the latter follow market rules and can better ensure that their investment achieves the greatest returns. This will result in a benign cycle and a win-win situation.