China's foreign investment soars in 10 months

China's direct foreign investment grew by over 53 percent in October, bringing the total for this year to more than the whole of 2003.

Actual foreign direct investment (FDI) has been calculated as US$53.781 billion in the first 10 months, up 23.47 percent year-on-year, according to the Ministry of Commerce.

Contracted direct investment, an indicator of future trends, increased by 34.19 percent to US$119 billion in the same period.

The ministry said China has approved 35,202 new foreign-invested ventures in the 10 months, up 7.66 percent.

Based on calculations using official information, actual FDI in October was US$5.089 billion, up 53.37 percent from a year earlier.

The growth rate of actual FDI continued the fast track of 44 percent in September, 55 percent in August and 46 percent in July.

The rate was higher because of the impact of the disease's aftermath.

But the high rate can be interpreted as a sign of confidence among investors that China's economy is successfully making a soft landing, said Sun Xiaohua, an expert from the Chinese Academy of International Trade and Economic Co-operation.

Other data in October have reinforced confidence, as growth in industrial production, consumer prices and money supply have shown some easing-up.

The debate on how China's economy will do once made many investors hold onto their money, Sun said.

China has moved to prevent overheating in some selected industries such as real estate, steel, aluminium and cement production.

But recent economic figures have proved the government's ability to engineer a "soft landing" for the world's fastest growing major economy and helped investors' confidence grow, Sun said.

Sun also said investors had been encouraged by China's opening service sector.

"Many foreign investors added their investment in expectation of another round of China opening," he said.

More capital is expected in fields such as banking, tourism, commerce, health and education as China sticks to December 11 WTO deadlines.

Sun believes FDI inflow will reach US$60 billion this year, judging by the present growth rate.

The Chinese Government has predicted actual FDI to China will match or exceed US$53.5 billion in 2003.

The World Investment Report 2004, released by the United Nations Conference on Trade and Development (UNCTAD) in September, predicted FDI would hit US$60 billion this year, compared with US$53.5 billion last year.

Another report issued by the Ministry of Commerce and the Academy of International Trade and Economic Co-operation on Friday said China's total foreign trade for 2004 is expected to jump by 30 percent year-on-year to US$1.1 trillion.

The report said that by year-end, China was expected to rank third in the world in terms of export value, moving one place up compared from year. The value of China's imports will remain third in the world.

Imports and exports in the first 10 months rose 35.8 percent year-on-year to US$926.47 billion dollars.

The ministry attributed China's surging foreign trade to an improving domestic economy, the recovering world economy and tax rebates for foreign companies operating in China.

The report forecasts brisk border trade and increasing direct investment will boost China's foreign trade value in 2005.

But soaring oil prices, continuing unrest in the Middle East and uncertainty of the US economy climate casts shadows over trade prospects.

People's Daily Online ---