China Listed as No. 1 in Attracting FDI

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Last updated at: (Beijing Time) Tuesday, September 24, 2002

China Listed as No. 1 in Attracting FDI

While most nations' power to attract investment is in decline, China's continues to grow. Increasing numbers of investors are expressing interest and confidence in the Chinese market. China has become the most attractive FDI nation, surpassing the United States for the first time, the latest survey result shows.

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China has become the most attractive FDI nation, surpassing the United States for the first time, the latest survey result shows.

The world-renowned consulting company A.T. Kearney announced the result from the survey of the Foreign Direct Investment (FDI) Confidence Index Monday.

It indicates that while most nations' power to attract investment is in decline, China's continues to grow. Increasing numbers of investors are expressing interest and confidence in the Chinese market.

The report shows that China scored 1.99 in a scale from zero to three, while the United States ranked second with 1.89 due to a slow economic recovery, enterprise scandals at companies such as Enron and WorldCom, as well as continuing worries about security in the world's biggest economy.

Several factors contributed to China's number one position, include its populous market, continued economic growth, stable political situation, sound investment environment, WTO membership and successful bid for the Olympics, said Paul A. Laudicina, managing director of global business policy council of A.T. Kearney.

He said China has become the first choice for global manufacturers because they have strong confidence in China's raw materials and skillful personnel.

In addition, China's enormous potential in the finance, service,infrastructure, telecommunications, wholesales and retail industries will also attract a great deal of foreign capital.

Laudicina said that, by 2005, half of all new 10,000-US dollar annual salary earners will be Chinese, noting that strong buying power is another factor for FDI flow.

The A.T. Kearney official added that China is not only a recipient of FDI, but also an investor.

Last year, the top 12 Chinese state-owned enterprises invested 30 billion dollars in foreign countries, an amount equivalent to the entire investment made by Latin America. Many Chinese small- and medium-sized companies also made investments in over 40 countries.

In order to maintain its advantage, China needs to strengthen infrastructure construction and promote the balance of local economy, he said.

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