China, the world's largest FDI receiver in 2002, vowed to maintain the scale of foreign direct investment in 2004 as the used FDI growth rate dropped for five consecutive months in the second half of 2003.
Yu Guangzhou, vice minister of commerce, said at a national conference in Beijing Sunday that China will keep improving investment conditions to attract FDI in the coming year.
China will offer more investment opportunities by opening its market and encouraging foreign investors to take part in the reform of state owned enterprises through mergers and acquisitions, Yu said.
Figures from the Ministry of Commerce (MOC) show that contracted FDI was 100.05 billion US dollars but actually used FDI was 47.15 billion US dollars in the January-November period, increasing by 37 percent and 0.2 percent year-on-year respectively.
FDI has accounted for 10 percent of China's total investment in fixed assets, MOC figures show.
Jin Bosheng, director of the FDI study department of the Chinese Academy of International Trade and Economic Cooperation, the MOC's think-tank, attributed the drop of growth to the impact of the SARS epidemic, which struck Beijing and Guangzhou in the first half of 2003.
But thanks to positive factors such as investment conditions, cheap labor, social stability and market potential, FDI to China will not drop in 2004, Jin noted.
While receiving foreign investment, China will try to attract more advanced technology, management and talent to better utilize the money, Yu said.
Foreign companies' research and development centers in China have increased from about 100 in 2000 to over 400 in 2003, with a total input of about 3 billion US dollars.
Foreign-funded companies in China, mostly import raw material and sell finished products after processing, and have become a major pillar of the country's foreign trade.
MOC statistics show that foreign-funded companies contributed half of China’s total exports.
China is pushing its domestic enterprises to invest abroad to explore international markets, especially in Russia, Latin America and Africa.
MOC figures show that by 2002, Chinese investors had set up 2,328 companies in 128 countries or regions and the investment totaled nearly 30 billion US dollars.
In the January-November period, China's contractual investment abroad was 1.74 billion US dollars, up 91.6 percent year-on-year.
(Xinhua News Agency December 29, 2003)
