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Foreign Funds Flowing Into China's High-tech Industries
More and more foreign businesses have begun to pour funds into China's high-tech industries in recent years, showing a strategic change in investment policies in China, an official with the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) said Sunday.
Hu Jingyan, director of the foreign investment department under the MOFTEC, reported that almost 100 high-tech research and development institutions under multinational corporations have been established in China.
The institutions include the renowned Microsoft China research institute, Intel China research center, Lucent China laboratory and Hewlett-packard center for digital data processing technology.
Most of the institutions were set up in the last five years.
Hu said, these research and development institutions are in the fields of electronics, biology, information industry, medicine, chemistry, building materials and textiles. They provide findings for worldwide clients and products to the Chinese market.
Hu, who is attending the Fourth China Fair for International Investment and Trade, which opened in the port city of Xiamen on Friday, noted that this shows that foreign investors have turned their attention to the high-tech sector in China, in accordance with the global development strategy and new development in the Chinese economy.
This echoes with the development trend in which many countries and multinational corporations have adjusted their strategies, highlighting high-tech development, an industry which has grown rapidly since the beginning of the 1990s.
Foreign funds first flew into China in 1980, most of which went into traditional industries.
Vincent Su, an economist from the United States, held that when China's economy enters a higher phase of development, the industrial structure will soon experience a transitional period, namely economic growth will shift from labor-intensive industries to capital-intensive high-tech ones.
China has adopted a strategy of revitalizing the nation through science and education under the tide of economic globalization and information revolution, and has made technological innovation the key factor that will push forward China's economy.
Experts have pointed out that China has created new opportunities for foreign business people to invest in its high-tech industries through the strategic readjustment of economic structure, in the development of China's western region, in the reform of state enterprises and in opening its market in line with the basic rules of the World Trade Organization (WTO).
William R. Fields, chairman of APEC from the U.S., said "large scale industrialization and technical innovation have decided that China will be the biggest market for western technologies in the world."
Last year, China worked out a series of policies to encourage multinational corporations to invest in the high-tech field, preferential tax treatment for research and development centers set up by foreign investors. This year, the State Council has issued regulations encouraging foreign business people to develop integrated circuits and the software industry.
It is known that a great number of multinational corporations are building their production bases in the economically-developed east and south China's coastal areas.
Motorola, for example, has decided recently that it will invest more in the development of high-tech products in China.
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