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Last updated at: (Beijing Time) Thursday, December 05, 2002

China to Draw US$50bn FDI, to be World's No 1 Recipient

This year China is likely to surpass the United States for the first time in reaping foreign direct investment (FDI), thanks to its robust economic growth and increasing appeal among international investors. "It's predicted that for the whole year, we are going to hit US$50 billion (in FDI)," Shi Guangsheng said Wednesday. "Hopefully we will become the world's No 1."


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China has over the years kept the fullest growth of a market economy in spite of an overall downhill capital market developed around the world. December 4, at the 2000 "China: the Year of Capital" seminar held in Beijing, Shi Guangsheng, Minister of the Ministry of Foreign Trade and Economic Cooperation talked happily about China's use of foreign capital. He said, "China is on the point to become the biggest recipient to draw at the finish over US$50bn foreign investment from abroad."

By statistics from the Ministry of Foreign Trade and Economic Cooperation, by last October China had given the nod to over 27630 foreign-funded enterprises showing a 35 percent growth over the same period of last year. With a contractual amount of US$75bn of foreign capital reported an actual sum of US$44.7 billion had been used to show a 20 percent growth of over the same period of last year, or a growth rate of 8.55 percent over last September of the year.

"According to a report by the United Nations Conference on Trade and Development (UNCTAD) lately released, in the past 9 months China has been by its use of foreign capital in a leader place atop other developing countries and areas. Of the world 500 strong, 400 have set up over 400 enterprises, research and development institutions in China. Up to 2002, there are as many as over 420,000 foreign-funded enterprises having been launched in China with a contractual sum of US$820.2bn of investment notched and an actual amount of over US$439.9bn having been used.

With an increased amount of foreign investment being used a change has also been seen in the number and types of foreign-funded industries and areas. In the meantime, a gradual optimization has been made of the investment areas. "Foreign investors have made a shift of their investment from general manufacture to basic industries, infrastructure facilities and new hi-tech industries. This is as shown by things in central and western China, to the name of these two Chinese areas positive achievements have been made in drawing and making the use of foreign capital.

Minister Shi told that China will go on encouraging introduction and development of new technology lines, encourage foreign investors to make investment in capital-intensive industries and build more technologically-advanced projects. "New policy efforts will be provided to help foreign investors with greater room and more areas for investment". Shi specially pointed out that China would further encourage efforts for developing new foreign-funded areas as launching limited companies, push ahead with BOT and license transfer, listing and issuance of stocks by the foreign investors in China.

New measures for improved environs for foreign investors will be adopted in contributing to China's software environment construction. Shi said that with effort for a perfect legal system China will decide on a whole set of laws to ensure the consistency, uniformity, stability, foreseeability and performance of policies and a transparent environment guaranteeing effective orderly use of foreign investment."

So far, China has formulated and perfected necessary laws and regulations ruling on financing, insurance, telecom, commerce, securities and service of various intermediary undertakings. Of these, 830 law and regulations have been cancelled and 325 revised in the way a legal system ensuring foreign investment has been basically built.

"China will go on with efforts to build an orderly well-regulated investment environment guaranteeing smooth operation of world capital," Shi said. Since its entry into the WTO, China has conscientiously fulfilled its promise to further open up its market and create conditions to convenience foreign investors' entry into the Chinese market. According to statistics released, since January 1, 2002, the Chinese government has reduced its tariffs on more than 5000 items of commodities by a big margin and the general tariff level has been cut from 15.3 percent to 12 percent.

"China will continue to further open up more areas to the outside world and make more efforts to regulate its market access for foreign investors to further their pursuits of investment in China," said Minister Shi.

By People's Daily Online


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