Foreign investment flowing into China has become an important component of the economy since the country joined the World Trade Organization three years ago.

"FDI has been integrating with Chinese employment, consumption and the service sector since China entered the WTO in 2001," stated Jin Bosheng, a researcher with the China Academy of International Trade and Economic Cooperation.

Zheng Weidong, of the Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), noted that ordinary citizens are building increasingly close and extensive ties with foreign-funded companies.

According to the Ministry of Commerce (MOC), there are 250 million urban employees in China, 25 million of whom work for foreign-funded companies. The jobs of 80 million Chinese are directly related to foreign trade.

Meanwhile, the growing number of foreign-funded factories has substantially improved China's manufacturing ability.

"China has bought more high-end machinery and electronic products from abroad, most of them are technology-intensive, especially in the automobile and home appliance sectors," Zheng said.

In the first 10 months this year, Chinese imports of color television sets decreased 40 percent by volume. The value of the sets, however, increased 73 percent. Zheng states that this is because China is now purchasing better-quality TVs.

CCCME reports that import volumes of digital video cameras, digital cameras and DVD players leapt 450 percent, 50 percent and 113 percent, respectively, in the first 10 months this year. Import values of the same products increased 155 percent, 100 percent and 30 percent.

As the Chinese market opens wider, people will enjoy a variety of improved and more convenient services.

Since December 11, foreign companies have been permitted to conduct retail and distribution business without limitations on location. Multinational retailers such as Wal-Mart and Carrefour have embarked on ambitious expansion programs, while many foreign companies stepped up market surveys in 2004, on commodities ranging from soap to high-end mobile phones.

Restrictions in the insurance, securities, banking and finance, tourism, transportation and storage sectors are being phased out as well.

China has also opened its telecommunication sector to some extent. Foreign investors have been granted permission set up joint ventures and provide services in Shanghai, Guangzhou and Beijing since December 11, with a maximum shareholding of 30 percent. Another 14 cities, including Shenzhen and Hangzhou, will open to foreign investment in telecommunications next year.

In the banking sector, the Hong Kong and Shanghai Banking Corporation Limited (HSBC) and the Beijing branch of the Standard Chartered Bank were approved to conduct RMB business in Beijing earlier this month, the first two foreign banks to gain such permission. Foreign banks will be allowed to provide comprehensive banking services in China by 2006.

Also in accordance with China's WTO commitments, foreign investors will be allowed to set up express and road freight businesses in 2005 and railway and logistics enterprises will be able to establish wholly owned companies in 2006.

(Xinhua News Agency December 29, 2004)