China's foreign direct investment (FDI) in the month of October was up by over 53 percent on the previous year, bringing 2004's total so far to more than that for the whole of 2003.

Actual foreign direct investment was calculated to be US$53.8 billion in the first 10 months, an annual rise of 23.47 percent, according to the Ministry of Commerce.

Contracted direct investment, an indicator of future trends, increased year-on-year by 34.19 percent to US$119 billion in the same period.

The ministry said 35,202 new foreign-invested ventures had been approved, up 7.66 percent.

The growth rate of actual FDI continued its fast track of 44 percent in September, 55 percent in August and 46 percent in July. It was thought to be higher because the impact of the SARS epidemic is wearing off.

But it can also be interpreted as a sign of confidence among investors that the economy is successfully making a soft landing, said Sun Xiaohua, an expert from the Chinese Academy of International Trade and Economic Cooperation.

Other data in October have reinforced confidence, as growth in industrial production, consumer prices and money supply showed some easing-up. Doubt over how the economy would fare once made many investors hold onto their money, Sun said.

China has moved to prevent overheating in some selected industries such as real estate, steel, aluminum and cement production.

But recent economic figures have proved the government's ability to engineer a "soft landing" for the world's fastest growing economy and helped investors' confidence grow, Sun said.

Sun also said investors had been encouraged by China's opening service sector.

More capital is expected in fields such as banking, tourism, commerce, health and education as China sticks to December 11 WTO deadlines.

The World Investment Report 2004, released by the UN Conference on Trade and Development (UNCTAD) in September, predicted that China's FDI inflow would hit US$60 billion this year, compared with US$53.5 billion last year.

Another report issued by the Ministry of Commerce and the Academy of International Trade and Economic Cooperation on Friday said China's total foreign trade for 2004 is expected to jump by 30 percent year-on-year to US$1.1 trillion.

The report said that by year-end, China was expected to rank third in the world in terms of export value, moving one place up compared to last year. The value of imports will remain third in the world. Imports and exports in the first 10 months rose 35.8 percent year-on-year to US$926.47 billion.

The ministry attributed China's surging foreign trade to an improving domestic economy, the recovering world economy and tax rebates for foreign companies operating in China.

(China Daily November 16, 2004)