China More Attractive to Foreign Investors

Home>>Business

Last updated at: (Beijing Time) Tuesday, December 25, 2001

China More Attractive to Foreign Investors

China has become a "safe island" in the eyes of numerous international investors, although the year 2001 witnessed the first drop of global investment in the last decade. An investigation by the American magazine Fortune shows that 92 percent of multinational corporations have a plan to set up their business headquarters in China.

Jiang on Attracting Foreign Investment

Foreign investment on the rise

According to latest figures from the Chinese Ministry of Foreign Trade and Economic Cooperation, China approved 22,915 new enterprises backed by foreign direct investment (FDI) in the first eleven months of 2001, up 16.32 percent from the same period of last year.

During this period, the contracted foreign investment totaled 60.41 billion U.S. dollars, a year-on-year increase of 24.38 percent; while foreign funds actually used rose 15.61 percent to 41.9 billion U.S. dollars.

The State Development Planning Commission estimated that the foreign funding materialized will reach 59.4 billion U.S. dollars this year, with FDI expected to total 47 billion U.S. dollars.

Since 1993, China has been ranked first among developing countries in drawing foreign investment, which analysts say reflects the continuous improvement of China's investment environment.

Chinese Premier Attends the National #Conference on Utilizing Foreign Direct Investment

Favorable factors

A number of factors contributed to the boost of foreign investment in China this year.

proactive financial policy

In 2001, China continued its proactive financial policy and stable currency policy, with its gross domestic product expected to grow 7.4 percent on a yearly basis.

Control loosened for investment

Wood Expo Lures Foreign Investments

China further loosened its limit on foreign investment, encouraging foreign businessmen to invest in the vast western territory and reviewing its existing laws and regulations on foreign investment according to its commitments upon entry into the World Trade Organization (WTO).

More sectors to be opened

According to China's promises upon its WTO entry, the country will open the sectors of commerce, finance, insurance and tourism wider to foreign investors and further improve its investment environment.

Many provinces began to regard FDI as booster of industry restructuring and upgrading. In Pudong of Shanghai, almost half of its 15.7 billion U.S. dollars of contracted foreign investment flew into the service industry such as domestic commerce, international trade and real estate.

The year 2002 may also see a fast growing China. The International Monetary Fund estimates China's economy to grow 6.8 percent in 2002. The United Nations Conference on Trade and Development, which sees possible decrease of global foreign investment, believes that more FDI will go to China next year. Some economists even expect that FDI to China in 2002 would exceed 50 billion U.S. dollars.

New ways for attracting investment

Nowadays, venture investment and investment fund have become new channels for luring foreign capital, especially those from multinationals, into the transformation of China's state-owned enterprises, observers say.

The Chinese government also encourages multinationals to establish research and development centers in China.

Foreign Direct Investment in China Increases: MOFTEC

China approved 20,549 new enterprises of foreign direct investment (FDI) from January to October 2001, 17.47 per cent above the same period last year, a source with the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) disclosed in Beijing on November 13.

During this period, the contracted foreign investment totaled US$55.20 billion, up 26.85 per cent over the same period last year, while foreign-funds in use increased 18.63 per cent to US$37.25 billion, according to the MOFTEC source. In Detail

Preferential Policies for Foreign Investors: PD Reports

China Massively Cuts Restrictions on Foreign Investors

Foreign Investors Encouraged to Enter Financial Leasing Firms

Foreign Investors Allowed to Control West-East Gas Pipeline Projects

China Welcomes Foreign Investors in SOEs Assets Restructuring

Foreign Investors Encouraged to Establish R&D Centers in China

Foreign Investors Welcomed to Explore Minerals: Minister

Foreign Investors Welcome to Develop China's Lithium Chloride Resources

For More

China to Allow Foreign Purchase of Small and Medium-Sized Chinese Enterprises: Official

Foreign Investors Hold More Power in Joint Ventures: Survey

China Sees Double-digit Investment Growth

>> Full Coverage