Foreign direct investment (FDI) in China soared between January and
April on the back of investor confidence in a strong domestic
economy and the country's entry into the World Trade Organization
(WTO).
Meanwhile, the country's trade volume in the first four months of
this year reached US$174.52 billion, up 10.5 percent from the same
period last year, the General Administration of Customs (GAC) said
on Wednesday.
China made use of US$14.1 billion foreign direct investment in the
first four months of this year, registering a 29.06 percent
increase on comparable months last year, according to the Ministry of
Foreign Trade and Economic Cooperation (MOFTEC).
Contracted foreign direct investment increased 5.10 percent
year-on-year to US$21.3 billion during the period.
Analysts attributed the big increase in actual foreign direct
investment in China largely to the country's recent WTO entry.
Starting this year, China is to open up its service sectors to
foreign investors in accordance with its WTO commitments.
These include telecoms, banking, insurance, tourism and trading,
which foreign investors have long coveted but which have largely
remained State monopolies.
China's WTO membership boosted foreign investor confidence in the
market with heightened expectations of transparency, stability and
predictability in Chinese trade and investment policies and an
improved business environment, said Long Guoqiang, a senior
researcher with the Development Research Centre of the State
Council.
Robust economic growth in China is also a major attraction to
foreign investors at a time when the world economic outlook is
gloomy, he said.
China's economy is still projected to increase 7.5 percent
year-on-year this year despite slack external demand owing to a
recession in the United States economy and stalling Japanese
recovery.
Long said he expected China to remain the destination of choice for
foreign investment in Asia, although many companies are tightening
their capital budgets under the double pressures of the economic
slowdown and the decline in capital markets.
There may be a leveling or modest decline in newly committed
foreign investment in China in the first half of the year compared
to the same period in 2001, he said.
Companies with multiple facilities or those that have already
committed capital are more likely to sustain their investment
programs than companies localizing their operations in China for
the first time.
Re-investment and investment in existing projects are more likely
to grow than new schemes, said Long.
China had approved the establishment of 388,945 foreign-invested
companies in the country at the end of April, with contracted
foreign capital of US$766.6 billion and a total of US$409.4 billion
actually used, according to MOFTEC statistics.
On
foreign trade, GAC figures show that exports in the January-April
period rose 12 percent to US$91.38 billion and import grew 8.8
percent to US$83.14 billion, leaving a trade surplus of US$8.24
billion.
In
April, the trade volume hit a record high of US$52.48 billion, a
year-on-year increase of 17.5 percent.
Of
the total, exports were valued at US$26.73 billion, up 17.2
percent, while imports reached US$25.75 billion, up 17.8 percent.
The month's trade surplus was US$0.97 billion.
In
the four months, primary product exports increased at a higher
speed and primary product imports started to grow. The trade volume
in this regard reached US$74.85 billion, up 6.3 percent.
Processing trade volume in the four months reached US$84.97
billion, jumping 15.2 percent, with export up 12.4 percent to
US$50.6 billion and import up 19.6 percent to US$34.37 billion.
China's steady economic growth, accession to the WTO and trade
promotion measures, as well as the robust recovery of the US
economy and growth of the world economy and trade contributed to
the growth, experts said.
(China
Daily May 16, 2002)