Would $50 Billion Foreign Investment Flow to China?

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Last updated at: (Beijing Time) Friday, August 09, 2002

Would $50 Billion Foreign Investment Flow to China?

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China is actively expanding ways for attracting foreign funds in the field of aviation, insurance, banking, retail and tourism. Some transnational corporations are also planning to move their headquarters to China.

Statistics show that in the first half of this year, number of newly-approved foreign-funded firms, volume of contractual foreign investment and actual foreign investment utilization increased by 26, 31 and 19 percent respectively.

However, it is still too early to be optimistic. China faced hardship at the beginning of the year.

First, investment from international companies decreased, for example, the year 2001 saw foreign direct investment stand at 760 billion US dollars, a decease of 42 percent, the first decrease since China began to attract foreign funds10 years ago.

According to an UN prediction, transnational direct investment in the year 2002 is estimated at 500 billion US dollars and international investment volume is on the decrease. This will increase China's difficulties in attracting foreign funds.

Secondly, there sees no turn of the world economy for the better, which has greatly weakened the investment from America, Japan and Europe.

In addition, regional economic cooperation shows robust development, while China is just at the initial stage.

Last year, China's actual foreign fund utilization was 46.8 billion US dollars, setting a historical high, an increase of 15 percent. According to the first half year's growth rate, the whole year may exceed 50 billion US dollars.

WTO effect is coming to show now. China launched new catalogs for foreign investment and formulated laws and regulations for opening to the outside world this year. Newly-approved foreign firms, especially the high-tech ones are on the rise.

Service industry becomes new hotspot and foreigners are confident in this field.

What's more important is that China maintained stable and coherent in policies for attracting foreign funds.

During the five years since the Asia Financial crisis, China launched many policies encouraging foreign funds. They have not only ensured the growth of foreign investment, but also played a very big role in curbing financial crisis.

China still has advantages in attracting foreign investment, if the world economy does not take a turn for the worse in the latter half of the year, foreign investment will keep growing in China and is expected to surpass 50 billion US dollars.

By PD Online Staff Li Yan

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