The flow of foreign direct investment (FDI) into the Chinese
mainland increased by nearly 13 percent to US$60.6 billion last
year, the Ministry of
Commerce said on Thursday.
They interpreted the figure as indicating that most foreign
investors shrugged off fears that the economy, which remains
overheated in some sectors, will have a hard landing.
Chong Quan, the ministry's spokesperson, said 700 research and
development centers had been set up on the mainland by foreign
companies and 30 multinationals had also chosen it for their
regional headquarters.
Industries such as equipment manufacturing and electronic
machinery attracted most of the foreign investment and, though
cooling measures did not affect overall figures, Chong said actual
FDI in some overheated industries slowed.
The number of newly approved foreign-funded companies in the
steel industry fell by 53 percent, while contracted investment
dropped 9 percent.
Actual and contracted foreign investment in the cement industry
sunk 67 and 74 percent respectively. No foreign investment was made
in the aluminum industry last year.
Chong said the northeast was the driver of FDI inflow; actual
and contracted investment increased by 78 and 40 percent
respectively in the region, where the central government is
currently engaged in a strategy of rejuvenation.
Japan, the US, British Virgin Islands and South Korea were among
the top sources of FDI.
In December, actual FDI totaled about US$3.1 billion, a fall of
more than 51 percent year-on-year, but contracted investment rose
26.7 percent to US$18.4 billion.
Jin Bosheng, an expert from the Chinese Academy of International
Trade and Economics, stressed that last month's drop in actual
foreign investment does not hint at a slowdown for next year, as
foreign companies are usually reluctant to make investments at the
end of the year.
"Momentum remains robust," he said, and the level of contracted
foreign investment shows a lot of money waiting to flow into
China.
Total contracted FDI reached US$153.5 billion in 2004, up 33.4
percent on the previous year.
(China Daily January 14, 2005)