For its first FDI report card of the year, China saw its foreign
direct investment (FDI) leap US$5.18 billion in January, up 13.9
percent on a year earlier, with China receiving some US$5.18
billion in FDI last month, the Ministry of Commerce said
yesterday.
"Domestic purchasing power is playing a bigger role in
attracting foreign investment," said Tim Condon, an economist at
ING Bank NV in Singapore. "But China also remains a very attractive
destination for companies relocating plants."
Foreign investors remain on a lucrative hunt in China despite
the country's unification of all corporate income taxes from both
foreign-invested and domestic companies, a move set to remove
foreign-funded businesses of favorable tax rates from 2008
onwards.
The move is part of the government's reposition from a previous
desire for maximum investment to a sharper focus on quality
investments.?
The Ministry expects the 2007 FDI to match last year's, but is
hoping to increase both quality and efficiency. The total FDI was
US$63 billion in 2006.
As it bolsters the growth of manufacturing sectors offering high
added-value and services industries, the government is considering
environmental impacts and has stopped approving foreign investors
who pollute or show themselves to be inefficient.
FDI to the less-developed central and western parts China is
also being promoted.
In the course of last month, the ministry approved 3,370
foreign-invested enterprises last month, up 10.71 percent
year-on-year. The total contracted investment was not disclosed
however pending the fulfillment of numerous agreements.
While Hong Kong, the Virgin Islands and South Korea were the top
three sources, FDI from US companies have increased by close to a
third since last year.
(China Daily February 15, 2007)