Why China Alone in Good Graces of Foreign Capital?

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Last updated at: (Beijing Time) Thursday, September 11, 2003

Why China Alone in Good Graces of Foreign Capital?

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The scale for China to attract direct foreign investment is getting larger and wider with its structure being continuously optimized and it sees an enhancement in the foreign investment quality, expressed Ma Xiuhong, Vice-minister of Ministry of Commerce on September 8 at the "International Investment Forum". She pointed out there are four major reasons that help make China favorable in the eyes of foreign investment.

Ma Xiuhong delivered the address in behalf of Lu Fuyuan, Minister of the Ministry of Commerce. Up to the end of July 2003 the number of enterprises set up with foreign investment has come to over 440,000 in all with a contracted foreign capital of over US$ 880 billion and an actual usage of more than 448 billion in US dollars. Last year when the global transnational direct investment saw a big downturn in scale China's actual usage of foreign capital exceeded US$ 52.7 billion, hitting a record high in history, ranking at the first place of the UNCTAC list.

During the past 7 months, the newly set-up enterprises by foreign capital came to a total of over 22,000 in China with a contracted foreign capital amounting to US$ 59.2 billion while the actual usage of it was 33.4 billion in US dollars. It is a respective increase of 19, 33 and 26 percent as compared to the same period of last year. In view of the present trend the direct foreign investment China is going to receive is estimated to overstep US$ 57 billion this year. So far, the number of overseas countries and regions invested in China has come to 186 in all, and among the global 500 large transnational corporations over 400 have come to invest in China with some 30 of them setting up regional headquarters in China.

Recent years have witnessed an obvious increase in the foreign investment for high-tech projects with a great batch of capital-techno-intensive enterprises of foreign investment coming to settle down in China while the R&D centers set up by transnational-corporations in varied ways and forms have surpassed 400 in number, pointed out Ma Xiuhong. In addition, The service scope and scale invested by foreign capital has witnessed a speedy expansion with a further optimized structure for investment since China's entry into the World Trade Organization. In 2002, the computer application service invested by foreign capital saw an increase of 125 percent, a 50 percent increase in broadcasting, TV and film industry, 68 percent in distribution service and a growth of 58 percent in transportation service as against those in the corresponding period of the year before. At present, the foreign investment covers the fields of manufacturing industry, service trade and infrastructure whereas the structure for the absorption of foreign investment has become more reasonable.

Over the past 20 years and more, the major reasons for China to retain a favorable development in the solicitation of foreign investment, pointed out Ma Xiuhong, are as follows: first and foremost, the Chinese government persists in the policy of reform and opening to the outside world, using foreign capital unwaveringly, keeping a long and relatively stable policy and regulations in drawing in the foreign capital, making them sustainable, foreseeable and practicable. Secondly, the Chinese economy has kept a sustainable, speedy and healthy development with a great potential in the market, which features rich resources while enjoying a low labor-coat and an increasing raise of quality, thereby providing the investors with a vast space for development. Thirdly, China has taken the advantage when the world economy is in the process of readjustment to continuously improve its investment policy, broaden the scope and ways in absorbing the foreign capital. Fourthly, the Chinese government has always been working on improving the environment for investment, especially in improving the flexible environment for it and has been taken as a work of importance to be grasped ceaselessly as always.

Article from China News Agency, Translated by PD Online Staff R. L. Han

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