Uncertainty overshadows FDI into China - special

11:06, June 01, 2009

FDI important for China economy
In 2008, the total number of foreign enterprises accounted for around 3% of businesses in China, they contributed:
45 million employment
29.7 percent of industrial output value
21% of taxes paid
55.3% of export value and 54.7% of import value

But it is diminishing
Since October 2008, foreign direct investment in China has dropped for 7 consecutive months, the first all-round drop in the country's absorption of foreign investment since the 1998 Asian financial crisis. And there is a dim prospect of growth in short term.

How things can be improved
China is working on a stable and transparent policy environment, a unified and open market environment and a standardized and efficient administrative environment for foreign investment. The mid-west region of the country is particularly attractive.
· Foreign capital utilized in China drops consecutively
That happened after the decrease moderated month by month in the first quarter. There was a mild drop in the manufacturing sector but a sharp one in the service sector.
· China's FDI down further in Q1 at slower pace
A year-on-year decline of 32.7 percent, 15.8 percent and 9.5 percent in January, February and March respectively; even growth in IT, electronic equipment manufacturing, pharmaceutical manufacturing.
· Number of newly registered foreign enterprises in China dropped in Q1
A big plunge.
· Ministry: foreign investment favors mid-west China
The place "would attract more foreign invested manufacturing enterprises from the coastal cities as infrastructures and transportation improved and logistic costs reduced there."
· China's retail sales, foreign investment in accommodation, food and beverage industries drop in Q1
The sector contributes 18 percent of the growth of China's total retail sales of all consumer goods.
· Difficult to restore FDI growth in China in short term
Less cross-border capital flow globally and more intensive competition for FDI will result to change in direction of FDI.
· China still attractive to foreign investment
Stable economic growth, a massive domestic market, low labor costs and an open market, the favorite developing nation of FDI for 17 years in a row.
· Interview: be part of success story in each other's market
"It is important to let SMEs know there is risk but also make them aware that they can cautiously grow fast in China. In the long run, European companies will be part of China's success story."
· European SMEs eye on China market
Fifty-three percent of SMEs are very optimistic, whereas only 16 percent of big ones are.
· Interview: Sichuan people to boost European business
"Sichuan is not an earthquake area. Sichuan is an investment area," said Joerg Wuttke, President of the European Chamber of Commerce in China.
· China further facilitates foreign investment inflow
Local governments get more power on approving foreign investment projects. Application for lifting supervision on equipment imported by foreign-funded companies ahead of designated time of lifting such supervision is no longer necessary.
· China to further improve environment for foreign investment
The Chinese government will continue to play its guiding role to create a favorable environment to attract foreign investment, said the Ministry of Commerce in a report.
· Foreign investment to be encouraged in 400-plus sectors in China’s mid-west
This new list expands the number of items to more than 400 from 267 in the 2004 list. A survey covering European enterprises show that most of them recognize less developed areas in China's mid-west will be the driving force of the whole economy.
· China to hold trade fair for foreign-invested companies with free booths, hotels, meals
Guangdong Province will host a trade fair from June 18 to 20 to help foreign-funded businesses cope with the economic downturn.

|About Peopledaily.com.cn | Advertise on site | Contact us | Site map | Job offer|
Copyright by people's Daily Online,all rights reserved