FDI in China Reaches New Record High

Home>>Business

Last updated at: (Beijing Time) Tuesday, January 15, 2002

FDI in China Reaches New Record High

Actual foreign direct investment (FDI) in China reached a new high at US$46.85 billion this year, as investors build up confidence in the market following its accession to the World Trade Organization (WTO), according to latest statistics released by the Ministry of Foreign Trade and Economic Co-operation (MOFTEC).

DISCUSSION

CHINESE

SEND TO FRIEND

FDI increased year-on-year

This registered a 14.9 percent year-on-year increase and wrote off 1998's record inflow of US$45.46 billion foreign capital into the market.

The rapid increase is a strong rebound from falls in China's use of FDIs in the past two years due to the 1997 Southeast Asian financial crisis.

The tumult shook up foreign investors' confidence in the so-called "tiger'' economies and decreased money input in China by 11.32 per cent in 1999 and a further 0.19 percent last year.

China is walking out of the shadow of the financial crisis as Southeast Asian economies recover from the attack, said Wang Zhile, a senior researcher with the Chinese Academy of International Trade and Economic Co-operation, a think-tank of MOFTEC.

Good economic performance lures foreign investors

He said China is also an attractive target for many foreign investors because of its outstanding economic performance against the background of a gloomy world economic outlook.

The Chinese economy is projected to have increased about 7.3 percent year-on-year last year, compared with 2.4 percent for the world as a whole, as estimated by the International Monetary Fund.

WTO entry boosts investors' confidence

China's WTO accession boosts foreign investors' confidence in the market, said Long Guoqiang, a senior researcher with the Development Research Center of the State Council.

He said the high rise in actual FDI was also a result of the rapid increase in China's contracted FDI last year.

Contracted FDI increased 10.43 per cent from 2000 to US$69.19 billion last year, according to MOFTEC statistics.

He said he expected the increase in China's use of FDI to accelerate this year, when China starts to carry out its commitments to the WTO.

Investment in service sector to rise high

Investment in China's service sector, including banking, insurance and telecommunications, will rise rapidly after China grants foreign investors larger access as a WTO member, said Long.

The point was echoed by Wang Zhile, who said the momentum in the increase of China's use of foreign investments is to be sustained for years after China's WTO entry.

China FDI Environment

Huge Market

Over the past ten-plus years, the scale of China's economic construction has been growing steadily, people's purchasing power has been increasing at an accelerated pace and the domestic market has been becoming increasingly brisk. Foreign investors can explore the Chinese market by investing and building enterprises in China.

Numerous Opportunities

Because of rapid economic growth, a great many construction projects and technological upgrading projects have been undertaken throughout China. China's rapid economic growth has also created a host of investment and development opportunities.

Preferential Policies

To attract foreign companies to invest in China. the Chinese Government has formulated many preferential policies in terms of taxation and import and export trade, and has introduced a relevant complete legal guarantee system.

Overseas Direct Investment to China Surges

FDI in China Expected to Reach Record High in 2002

Statistics on China's Economy in Recent Five Years