This year China is likely to surpass the United States for the
first time in reaping foreign direct investment (FDI), thanks to
its robust economic growth and increasing appeal among
international investors.
"It's predicted that for the whole year, we are going to hit US$50
billion (in FDI)," Shi Guangsheng, minister of the Ministry of
Foreign Trade and Economic Cooperation (MOFTEC), said yesterday.
"Hopefully we will become the world's No 1."
Shi made the forecast while addressing The China Conference: the
Year of Capital, a high-profile seminar organized by the Euromoney
Conferences, a division of Euromoney Institutional
Investor PLC.
The two-day event, co-hosted by the Industrial and Commercial Bank
of China (ICBC)
and the Hongkong and Shanghai Banking Corporation Limited (HSBC), opened yesterday and drew
more than 700 participants from 24 countries and regions.
For the past nine years, China has been the biggest developing
country recipient of FDI but has remained behind the United States.
A strong performance so far this year is boosting optimism.
"From January to October, we achieved important progress," Shi
noted. New foreign-invested businesses registered in the first 10
months soared by 35 percent year-on-year, to 27,630, bringing an
actual investment of US$44.7 billion, up 20 percent from a year
earlier.
And with the fresh capital came a more desirable geographic and
industrial allocation: "It has been increasingly shifting from
general manufacturing to infrastructure and high-tech," Shi said.
"And the central and western areas are also witnessing rapid
progress."
The minister added that "China has become a priority for foreign
investors."
Over the past year, Shi said China, as a World Trade Organization
(WTO) member, has fulfilled its commitments to reduce tariffs and
scrap other trade barriers, and has either revised or cancelled
2,300 regulations, which means it has "basically" completed its
WTO-driven law-mending work.
A
WTO-related legal framework, focused on legislation governing
Sino-foreign joint ventures, cooperatives and wholly foreign-owned
businesses, has been "basically established," Shi said.
But China is facing growing competitive pressure from neighboring
countries, which, in the face of a global slide in FDI last year,
are stepping up efforts to woo foreign investors by refurbishing
their investment environments and offering favorable policies,
other officials said yesterday.
To
remain competitive, Shi said China plans to further improve its FDI
regulations and make them "more predictable, consistent and
workable," and also plans to simplify approval procedures.
Also at the seminar, senior representatives from foreign companies,
including HSBC, Siemens Ltd and BP, expressed satisfaction with
China's progress in improving its business environment, confidence
in China's economic prospects, and a clear intention to further
invest.
Noting complaints from his peer investors over slow progress in
gaining new market share, HSBC Chairman David Elton urged a
long-term perspective in the complex and increasingly competitive
China market, citing his bank's own strategy. "Short-term thinking
is more and more prevalent," he noted.
Referring to its recent equity purchases into a Chinese bank and an
insurance company, Elton said: "In reality, we know the biggest
return from these investments won't come for decades."
(China Daily December 6, 2002)