Beijing Reports 86% Rise in FDI

Strong growth in foreign direct investment (FDI) in Beijing this year is an indicator that the city's economy is doing well, sources from Beijing Customs said.

During the first four months of this year, the total foreign investment in the city was US$160 million, an 86 per cent increase compared with the same period last year.

Beijing's FDI growth rate was 74.8 per cent higher than the average rate for the country as a whole.

Hou Min of the Beijing Customs Service attributed the growth to preferential policies offered by the government, investors' confidence in the Chinese economy and increasing demand on international, especially the Asian, markets.

With support from the central government, the Beijing municipal government has issued tax breaks, opened more markets, eased foreign currency controls and has allowed easier staff transfers, to help attract foreign funds.

Taking the advantages of rich talent and information resources, and relatively advanced transport and infrastructural systems, the municipal government is doing what it can to speed up the development of the city's high-tech industry.

During the first quarter of this year, the total output value and the net profit of Beijing's high-tech sector increased by 42.7 per cent and 310 per cent when compared with the same period in 1999.

The rapid development of the high-tech industry, the world's new economic growth point, stimulated the enthusiasm of foreign investors, especially in the electric information and the telecommunication sectors.

Along with the China's pending entry into the World Trade Organization and Asia's recovery from its financial crises, foreign enterprises and financial institutes are paying more attention to China, a large market with great potential.

"Beijing, as the capital city of China, possesses specific attributes that come with its status as an international metropolis, which might be a reason for its becoming a hot spot for the investors," Hou said.

From October 1998 to the beginning of 2000, Beijing and the country's FDI rate declined monthly, but Beijing has taken the lead in a revival since February.

"The recovery of Asian countries from the financial crisis is providing business opportunities for export-oriented enterprises, especially for the processing industry sector," Hou said.

From January to April this year, processing trade exports grew by 65 per cent more than the corresponding period of last year.

More than 60 per cent of those exports were to Asian countries, including Japan, Singapore and South Korea.

"In Beijing, 70 per cent of foreign-funded enterprises, including solely foreign-funded firms and joint ventures, were reported engaged in the processing trade, and the favourable situation has strengthened investors' confidence in reinvesting in the city," Hou said.



People's Daily Online --- http://www.peopledaily.com.cn/english/