China utilizes foreign capital through various channels and
forms, which fall into three major categories: 1) foreign loans,
including loans from foreign governments, international financial
organizations and foreign commercial banks, export credits, and
issuance of bonds overseas; 2) direct foreign investment, including
Chinese-foreign equity joint ventures, Chinese-foreign cooperative
joint ventures, wholly foreign-owned enterprises and
Chinese-foreign cooperative development projects; 3) other foreign
investments, including international leasing, compensation trade,
processing and assembly and issuing stocks overseas. From 1979 to
2004, foreign capital utilized by China in real terms totaled
US$743.6 billion, including US$560.4 billion of direct investments
by foreign businesspeople. In 2004, foreign investment maintained
its momentum of rapid increase, and foreign capital utilized in
real terms for the year totaled US$64.1 billion, of which direct
foreign investment amounted to US$60.6 billion.
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Since the 1980s, China has devoted great human, material and
financial resources to construct infrastructure facilities to help
create a favorable environment for foreign investors to invest in
China. The Central Government has promulgated more than 500
foreign-related economic laws and regulations to provide legal and
other guarantees for foreign investors in China. At the end of
1997, China revised and promulgated the Foreign Investment
Industrial Guidance Catalogue to encourage and support foreign
businesspeople to invest in the comprehensive development of
agriculture, energy, communications, important raw and processed
materials, new and high technology, the comprehensive utilization
of resources, and environmental protection. In accordance with the
rules of the WTO and China's undertakings, China has basically
completed the rationalization and revision of foreign-related
economic laws and regulations. A foreign-investment law system has
been formed, its mainstay being the Law on Chinese-Foreign Equity
Joint Ventures, the Law on Chinese-Foreign Cooperative Joint
Ventures, the Law on Foreign Investment Enterprises and the
relevant rules for the implementation of these laws. By the end of
2004, foreign businesspeople from more than 170 countries and
regions had invested in China, with a total of 509,000
foreign-invested enterprises. Of the world's top 500 transnational
companies, over 400 have invested here. China has been hailed by
investors and the financial world as among the countries with the
best investment environment.