China regained its position as the largest foreign direct
investment (FDI) recipient in both Asia and the developing world
last year.
"FDI inflows to China reached US$47 billion in 2001, a 15 per cent
rise over 2000. The momentum continued in the first half of this
year, with inflows rising by 19 per cent over the same period of
2001," according to the World Investment Report 2002, released
yesterday by the United Nations Conference on Trade and Development
(UNCTAD).
China ranked sixth across the globe in terms of the total volume of
FDI inflows, the report said.
FDI continues to play a prominent role in China's economy - foreign
affiliates now account for 23 per cent of the total industrial
value added - 18 per cent of tax revenues and 48 per cent of total
exports, the report indicated.
"The FDI fever in China is partially prompted by the country's
World Trade Organization (WTO) accession," said James Zhan, a
senior economic affairs officer of the Division on Investment,
Technology and Enterprise Development under the UNCTAD.
Responsible for drafting the Asia-Pacific part of the report, Zhan
mainly attributed China's dramatic temptation to FDI, to the
country's sound investment environment and enormous business
potentials.
FDI flows to the developing economies of the Asia-Pacific region
declined 24 per cent last year to US$102 billion, down from US$134
billion in 2000.
Much of the downturn was due to a 60 per cent drop in flows to Hong
Kong, which had recorded massive inflows, US$62 billion, in 2000,
said the report.
In
global inflows, the share of the region's developing economies rose
from 9 per cent in 2000 to nearly 14 per cent in 2001, but was
still below 1993-94 levels.
Overall, prospects for FDI in the Asia-Pacific region remain
"bright," said the report.
Over half of respondents in a recent survey considered those
prospects to be "improved" or "significantly improved" over the
next three to five years.
The report suggested China topped the list in Asia, followed by
Indonesia and Thailand.
On
the other hand, outward FDI from China increased dramatically, and
Chinese firms have been expanding abroad rapidly.
"As of last year, the top 12 Chinese transnational corporations
(TNCs), mainly State-owned enterprises (SOEs), controlled over
US$30 billion in foreign assets - close to the entire outward stock
of Latin America in the mid-1990s - with some 20,000 foreign
employees and US$33 billion in foreign sales," said the report.
"Private enterprises are now following the SOEs abroad, although
most of them are small and medium-sized TNCs. They now have
investments in over 40 countries all around the world," the report
said.
Outward FDI from the Taiwan Province of China, by contrast, fell 18
per cent last year, the report revealed.
"Much of this investment went to the Chinese mainland, and the
nature of these transferred activities has changed over time, from
labor-intensive in the 1980s to capital-intensive and
high-technology in the late 1990s.
The report predicted that the trend is likely to continue, given
the easing of restrictions on FDI from Taiwan into the mainland and
the WTO accession of both economies.
(China
Daily September 18, 2002)