Overseas Investment to China to Hit All-time High

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Last updated at: (Beijing Time) Friday, December 27, 2002

Overseas Investment to China to Hit All-time High

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One of the most striking features in China's economic life this year is the surge in overseas direct investment. The investment volume is expected to surpass 50 billion US dollars this year, hitting an all-time high.

Figures released by the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) show that from January to November the amountof overseas direct investment to China came to 76.947 billion US dollars in contractual volume, up 27.38 percent over the corresponding period last year. Actual overseas investment reached48.011 billion US dollars, up 14.59 percent.

Analysts say China is set to have 50 billion US dollars of actual overseas investment this year. That amount will possibly make China the biggest recipient of direct overseas investment worldwide.

Such growth was achieved against a background of declining world investment. The total world volume of direct investment was between 1,400 to 1,500 billion US dollars in 1999. In 2001, the figure dropped to around 700 billion US dollars, and this year wasexpected to be 580 billion US dollars.

"The surge of overseas direct investment was a result of China's huge market and high returns on investment here," said one analyst who declined to be named. "China is also the safest place for investment."

In terms of the investment environment, infrastructure facilities including telecommunications and transport among others,have greatly improved both in coastal and inland areas.

China is rich in a cheap labor force and abundant raw materialsresources. China also enjoys good relations with neighbors and other parts of the world, all factors important to investors.

Moreover, China's entry into the World Trade Organization (WTO)played an important role in boosting the confidence of overseas investors.

China's WTO membership would gradually create a mature legal environment, a unified, transparent, stable and predictable policyenvironment, an open, just, clean and effective administrative environment, and a unified and open market for fair competition, MOFTEC Minister Shi Guangsheng said.

More overseas investment is pouring into certain areas encouraged by China, including the restructuring of state companies, development of western parts of the country, energy, infrastructure, environmental protection, hi-tech, and export-oriented firms.

"China's market is one of the most active across the world," Minister Shi said. "The contractual overseas investment grew about30 percent this year, showing there is still room for overseas investment in 2003."

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