China still a hot spot for foreign investment

10:43, March 25, 2010      

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The recent flap with Google was an isolated case and foreign investment in China is stronger than ever, said Yao Jian, spokesman of the Ministry of Commerce.

"China will provide a favorable investment environment for foreign investors, with an improved legal system, full market potential and more effective intellectual property rights protections."

Google, Inc. announced Tuesday morning that it would stop "censoring" its search results in China and accused China of hacker attacks.

An official with the State Council Information Office noted that foreign companies operating in China should obey Chinese laws. The relationship between multinationals and host countries also sparked hot public discussion.

In fact, a recent survey showed that 90 percent of foreign companies believe that China is still their top choice, said Yao.

Foreign investors optimistic in China

It was ridiculous to regard Google's departure as a sign for the deterioration of China's operation environment, said Mei Yuxin, a researcher with a think-tank under the MOFCOM. The continued rapid growth of foreign direct investment (FDI) into China proves this theory wrong, he said.

From 1993 to 2009, China has been FDI's top destination among developing countries for 18 consecutive years.

In 2009, although the global FDI flow was severely impacted by the financial crisis, FDI in China totaled $90.03 billion, ranking the second worldwide.

In the first two months of 2010, FDI in China grew nearly 5 percent from the previous year to over $14 billion. Around 3,163 new foreign-funded enterprises were established, up 14.6 percent compared to the same period in 2009.

Foreign companies enjoyed generous profits in China. Investment by American companies can be found in all 29 categories of China's industry and 100 service sectors that China promised to open. According to the American Chamber of Commerce in China (AmCham-China), 74 percent of its members reported positive profits in 2008.

China's markets are fair to foreign companies and they have equal market opportunities with domestic companies. In 2009, foreign-funded companies participated in 71 percent of China's 12,000 public international purchase bids for machinery and electric products, and won 6,887, or 77.8 percent of the bids.

A more open China

China will make institutional arrangements to turn the country into a "fair playing ground" for foreign investors and grant foreign enterprises "national treatment," said Premier Wen Jiabao at a press conference in response to a question on Chinese investment environment for foreign enterprises after Google's claim to pull out from the Chinese market and the arrest of Rio Tinto's four employees on charges of stealing state secrets.

Foreign enterprises' further development in China and a mutually beneficial situation have always been the Ministry of Commerce's aim.

China will expand its opening up, and improve the quality of foreign capital usage, said Commerce Minister Chen Deming.

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