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'99 World 500
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China Continues to
Be Major Investment Destination Despite this year's decline in capital influx, China will continue to be a
major destination to foreign investment in the years to come, according to participants in
the '99 Fortune Global Forum.
The business elite are in the view that China is more and more attractive to overseas
investors because it has maintained political stability and rapid economic growth for
years and has great market potential.
In the first seven months this year, China approved 9,368 overseas-funded enterprises
during the first seven months of this year, with combined contractual overseas investment
of 22.2 billion US dollars and paid-in overseas capital of 21.4 billion US dollars, down
18 percent, 20 percent and 10 percent, respectively, on a year-on-year basis.
Foreign direct investment to China grew by almost 10 billion U. S. dollars each year
between 1991 and 1996, according to statistics.
Analysts attribute this year's decline partly to the growing transnational mergers and
acquisition in developed countries, which has led to the first drop in capital flow to
developing countries since 1985.
Another major factor is the adverse impact of the Asian financial crisis which reduced the
capital export of many Asian countries and regions, China's major source of overseas
investment.
However, participants in the forum have expressed confidence in the Chinese economy and
many said that they will make further efforts to increase their presence in China.
There is no country but China that has both great growth potential and huge market
capacity, according to Richard Junior Wagoner, president of General Motors.
There are many new areas in China yet to be tapped by overseas investors, said Shigeji
Ueshima, president and CEO of Mitsui & Co., Ltd., adding that his company is
considering entering three new sectors including distribution.
Many participants have noticed China's new preferential policies to encourage foreign
investors, saying that the move will provide more opportunities to overseas investors.
These policies, announced earlier this month, include tax breaks and lift of restrictions
on overseas investment in 10 sectors including finance, insurance, telecommunications,
foreign trade and aviation. (Xinhua)
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