According to latest figures from the Chinese Ministry of Foreign Trade and Economic Cooperation, China approved 22,915 new enterprises backed by foreign direct investment (FDI) in the first eleven months of 2001, up 16.32 percent from the same period of last year.
During this period, the contracted foreign investment totaled US$60.41 billion, a year-on-year increase of 24.38 percent; while foreign funds actually used rose 15.61 percent to US$41.9 billion.
The State Development Planning Commission estimated that the foreign funding materialized will reach US$59.4 billion this year, with FDI expected to total US$47 billion.
Since 1993, China has been ranked first among developing countries in drawing foreign investment, which analysts say reflects the continuous improvement of China's investment environment.
A number of factors contributed to the boost of foreign investment in China this year.
In 2001, China continued its proactive financial policy and stable currency policy, with its gross domestic product expected to grow 7.4 percent on a yearly basis.
China further loosened its limit on foreign investment, encouraging foreign businessmen to invest in the vast western territory and reviewing its existing laws and regulations on foreign investment according to its commitments upon entry into the World Trade Organization (WTO).
According to China's promises upon its WTO entry, the country will open the sectors of commerce, finance, insurance and tourism wider to foreign investors and further improve its investment environment.
Many provinces began to regard FDI as booster of industry restructuring and upgrading. In Pudong of Shanghai, almost half of its US$15.7 billion of contracted foreign investment flew into the service industry such as domestic commerce, international trade and real estate.
The year 2002 may also see a fast growing China. The International Monetary Fund estimates China's economy to grow 6.8 percent in 2002. The United Nations Conference on Trade and Development, which sees possible decrease of global foreign investment, believes that more FDI will go to China next year. Some economists even expect that FDI to China in 2002 would exceed US$50 billion.
Nowadays, venture investment and investment fund have become new channels for luring foreign capital, especially those from multinationals, into the transformation of China's state-owned enterprises, observers say.
The Chinese government also encourages multinationals to establish research and development centers in China.
(People's Daily December 25, 2001)
