Annual FDI to China Expected to Reach US$100 Billion

Home>>Business

Last updated at: (Beijing Time) Thursday, January 02, 2003

Annual FDI to China Expected to Reach US$100 Billion

Foreign direct investment in China is expected to reach US$100 billion in every year of the 11th Five-Year Plan period (2006-10), experts said Wednesday.

DISCUSSION

CHINESE

SEND TO FRIEND

Foreign direct investment in China is expected to reach US$100 billion in every year of the 11th Five-Year Plan period (2006-10), experts said Wednesday.

The Development Research Centre under the State Council based its assessment on China's entry into the World Trade Organization, rapid economic growth, western development, political stability and the successful bid for the 2008 Olympic Games.

More than US$50 billion foreign direct investment is expected to flow into China last year, with the country taking the United States' place as the world's largest recipient of foreign direct investments.

"This is a good starting point. Foreign investments flowing into China are expected to make big breakthroughs in the next five years,'' said Long Guoqiang, a senior researcher with the centre.

China is expected to continue improvement of its infrastructure, with the country's low costs remaining an important factor in attracting foreign investments.

A major reason behind the big increase in China's foreign direct investment is that more transnational corporations are moving their manufacturing operations to China, said Long.

China's WTO entry turned many potential foreign investors into actual investors in the country, he said.

The Chinese market will also grow to support better business development. The improvement of government services, policy stability and legal transparency will also attract more foreign investment, said the senior researcher.

China's expected rapid national economic growth and the start of a new round of trade liberalization talks will also create new business opportunities for foreign investors, said Jin Baisheng, a senior researcher with the Chinese Academy of International Trade and Economic Co-operation, a think tank of the Ministry of Foreign Trade and Economic Co-operation.

A recent United Nations report showed China is the favourite destination for many potential international investors.

But experts cautioned against over-optimism of China's use of foreign direct investments.

Long said US$50 billion represents only a moderate growth from last year's US$47 billion and that China has become the world's largest recipient mainly because foreign direct investment in the United States dropped in the past year.

Foreign investments are unbalanced in the three industrial sectors, with primary industries accounting for a mere 3 per cent of China's total foreign investments and tertiary industries making up 25 per cent, according to official statistics.

"Channeling more foreign investments into agriculture and the service sector will be an important task for the MOFTEC in the new century,'' said Jin.

Despite the Chinese Government's commitment to western development and favourable measures to try to direct foreign investors to the region, the 12 provinces, autonomous regions and municipality in the west make up only 5 per cent of China's total foreign investments in terms of accumulative amount.

Many foreign and domestic investors still complain about China's investment environment and the Chinese Government has a lot to do on issues such as the business environment, transnational mergers and acquisitions, industry direction, regional distribution and transformation of government function, said Long.

Questions?Comments? Click here

Actually Used FDI in China Exceeds 48 Billion US dlrs

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

Controversial US Scientist Claims Birth of First Cloned Human ( 2 Messages)

US Image Is Worsening Worldwide: Review ( 2 Messages)

Pyongyang Orders IAEA Inspectors to Leave ( 2 Messages)

China Set Trade Growth Goal at 7 Percent in 2003 ( 8 Messages)

China Launches 'Shenzhou IV' Unmanned Spacecraft ( 9 Messages)