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Foreign investments flood into new Chinese industries

(Guangming Daily)

14:34, September 13, 2011

Edited and translated by Yao Chun, People's Daily Online

The 2011 International Investment Forum opened on Sept. 8 in Xiamen, Fujian province with the theme "The 10th Anniversary of China's Accession to the WTO: Openness, Cooperation and Mutual Benefit."

This forum has attracted nearly 500 leading investors from 108 countries who are closely watching the investment environment of China.

On a positive note, foreign enterprises are showing great enthusiasm about investing in China. They are looking for business opportunities and negotiating projects in the 15th China International Fair for Investment and Trade, which is being held at the same time. However, China is confronted with various obstacles, such as land scarcity, environmental issues and resource constraints. Rising labor costs in China also pose a new challenge for many foreign investors, who are concerned about it.

The forum reveals a clear signal that China will encourage foreign investments in sophisticated manufacturing, the modern service industry as well as new energy and environmental protection. In the foreseeable future, China's investment environment will continue to maintain a competitive advantage.

According to the 2010-2012 World Investment Prospects Survey issued by the U.N. Conference on Trade and Development, China remains a top destination for investments from multinational companies, and China's investment environment has been constantly improving.

"Transnational corporations are very smart. If China's investment environment were not so good, they would not invest in China," said Chen Deming, the minister of the Ministry of Commerce of China.

The chairman of the board of directors of OMRON Corporation said that various new factors, such as an industry cluster in the coast and newly issued regulations protecting intellectual property, are revitalizing the competitiveness of China's investment climate, which is attracting multinational companies to transfer their regional headquarters and research and development centers to China.

With the increasing gravitation of foreign direct investment toward developing and transitional economies, including China, the proportion of foreign investment in high-tech industries to foreign investment in manufacturing industries has increased to 24 percent. At the same time, China is paying more attention to the structure and quality of foreign capital, which has migrated from manufacturing industries to the design and development sector as well as services marketing areas.

Edmund Phelps, winner of the Nobel Prize in economics, believes China should rely on the experience acquired in the development of production to begin to conceive, design and produce its own new products and make an effort to develop domestic and international markets for them.

According to statistics 178 countries around the world have investments from China. Overseas Chinese companies have offered employment to 780,000 local people and the cumulative taxes paid by them has reached 11.7 billion U.S. dollars.


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