Foreign direct investment (FDI) in China surged by almost 50 percent to US$3.59 billion in the first month of this year.

Analysts said yesterday they expect FDI in the country to continue to grow this year despite a weak global economy.

Contracted foreign investment, an indicator of future trends, jumped 65.34 percent year-on-year in January to US$9.24 billion, the Ministry of Foreign Trade and Economic Cooperation said in a statement yesterday.

China attracted a record of US$52.7 billion in foreign direct investment last year as more foreign businesses tapped its potentially vast market.

A total of 3,349 new foreign-funded enterprises were approved last month, up 33.69 percent year-on-year, the ministry said. By January, China had approved the establishment of 427,545 foreign-funded enterprises with a contracted foreign investment of US$837.3 billion and actual foreign investment of US$451.6 billion, according to the ministry.

Sun Xiaohua, a senior expert on foreign investment with the Chinese Academy of International Trade and Economic Cooperation, the think-tank of the foreign trade ministry, identified the development of China's western regions and multinationals' mergers and acquisitions as the new drivers in FDI flow this year.

Sun said the government's decision to encourage foreign investment in the restructure of state-owned enterprises will also provide more opportunities for FDI.

Zhang Feng, an expert from the State Information Center, forecast that the FDI growth rate would reach around 10 percent this year. More offshore capital will flow into fields such as banking, tourism, commerce, hospitals and education as China gradually lifts its restrictions on foreign investment, Zhang said.

(China Daily February 18, 2003)