Doubts Raised over China's Foreign Investment Goal

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Last updated at: (Beijing Time) Friday, September 05, 2003

Doubts Raised over China's Foreign Investment Goal

China's attempt to attract 60 billion US dollars of foreign direct investment (FDI) this year is questioned as actually-used FDI in July reported less than the average amount of the first half year.

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China's attempt to attract 60 billion US dollars of foreign direct investment (FDI) this year is questioned as actually-used FDI in July reported less than the average amount of the first half year.

The Ministry of Commerce (MOC) said China actually used 3.1 billion US dollars of foreign investment in July, compared with five billion US dollars monthly on average in the first half of this year.

Hu Jingyan, a senior official with the MOC, admitted that it would be difficult for the country to top 60 billion US dollars of actually-used FDI by the end of this year, which meant the country would have to use 5.3 billion US dollars of FDI every month in the last five months.

But the actually-used FDI was expected to reach 56 billion to 58 billion US dollars this year with year-on-year growth of seven to 10 percent, he added.

China used 33.35 billion US dollars of FDI in the first seven months of 2003, a rise of 26.63 percent year on year while contractual FDI rose by 33.96 percent to 59.17 billion US dollars, according to the ministry figures.

Last year the country reported a record high actually-used FDI of 52.7 billion US dollars, the highest in the world.

The outbreak of SARS in the first half of this year had not had an obvious effect on the country's economy in the second quarter. The actually-used FDI reported 6.98 billion US dollars in June.

The impact seemed delayed until July when some 500 foreign investment projects were affected by the epidemic.

China was facing more competition from other countries in the global market as they lifted government controls and widened market access to attract more foreign investment, said Ma Xiuhong,vice-minister of commerce.

China has to further improve its domestic environment for foreign investment in a bid to increase the competitiveness in the global capital market, she said.

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