China has set an example for developing countries in making use of foreign direct investment (FDI), said Supachai Panitchpakdi, Secretary-General of the United Nations Conference on Trade and Development.

Supachai is attending the tenth China International Fair for Investment and Trade which opens Friday in Xiamen, Fujian Province.

Policies on foreign direct investment should not stress the amount of investment but should emphasize the quality, said Supachai, adding that China has become more selective in its foreign investment now orienting towards technology.

In the past years, economists believed that reform and less control would bring economic growth and reduce poverty. However, facts prove that merely relying on market mechanisms or government intervention would not guarantee economic success, said Supachai.

Supachai praised China's implementation of its commitments to the World Trade Organization. China is not only an example for attracting foreign investment but also for increasing investment abroad, said the official.

Supachai also pointed out China's use of macroeconomic instruments to maintain economic stability.

(Xinhua News Agency September 8, 2006)