Foreign-funded enterprises have invested a total of US$2.11 trillion in China as of the end of last year, up 23.5 percent year-on-year, the State Administration For Industry and Commerce (SAFIC) said on Tuesday.
The cumulative total dates back to 1978, when China began its reform and opening-up policies.
Also during that period, a cumulative total of 286,200 foreign-funded companies were approved to invest in China, up 4.14 percent year-on-year. In 2007 alone, the number was 37,888, down 8.69 percent from 2006. And in January this year, China approved 2,918 foreign-funded companies, down 13.41 percent year-on-year.
Foreign-funded companies will find the environment more competitive as a result of tax changes. The new corporate income tax law that took effect on Jan. 1 unified the income tax rate for domestic and foreign companies at 25 percent. Previously, the effective rate was 25 percent for Chinese companies and 15 percent for foreign enterprises.
Although fewer foreign companies were approved, those that have come to China recently are larger, with an average registered capital that rose 28 percent to 4.63 million U.S. dollars in 2007.The average registered capital for all foreign companies increased17.23 percent to 4.04 million U.S. dollars.
Some other trends SAFIC noted for foreign investment:
-- The number of real estate companies with foreign investment rose only 2.1 percent to 14,700 last year, due to macro-economic policies.
-- No foreign investment projects in the steel, cement or electrolyzed aluminum sectors have been approved since 2005. These are sectors that China is seeking to restructure.
-- The lion's share of new foreign firms are in the manufacturing sector.
-- Wholesale and retail enterprises were the second-most common type of foreign project, attracting 20,000 firms, up 26.49 percent year-on-year.
-- Foreign-funded banks expanded rapidly last year, as 18 foreign banks have been locally incorporated since the government began to approve such operations on March 29, 2007.
-- Asia remained the biggest investment source for China, with 206,7000 firms, followed by North America, the European Union and Latin America.
(Xinhua News Aegncy March 13, 2008)
