China still attractive to foreign investment

A new survey shows that China remains very attractive to international direct investments. This is despite given the fact that China will continue to be affected by the sharp decrease in global transnational direct investments in 2009, said China's Ministry of Commerce (MOFCOM). The series of policies the Chinese government has implemented to expand domestic demand and stabilize exports will also further boost foreign investor confidence. The foreign capital China attracts will maintain stable growth.

The United Nations Conference on Trade and Development's survey in 2008 reveals that the four major factors of stable economic growth, a massive domestic market, low labor costs and an open market, have caused China to continue to become the most attractive host country for investments, said Yao Jian, spokesperson of MOFCOM, during a press conference.

In addition, a survey recently released by the US-China Business Council also shows that 88 percent of the enterprises interviewed had earned profits in China. 81 percent saw their profits in China higher than or equivalent to their global profit margin, and 85 percent made China their company's first choice for overseas business.

According to statistics of the UN, following the sharp decrease of 21 percent in 2008, global direct investments may further decline by 30 to 40 percent in 2009. Yao said that this will have a certain impact on China's ability to attract foreign capital.

Statistics released by MOFCOM today indicates that the decline in China's absorption of foreign capital has slowed down in February 2009. Foreign capital actually utilized in February amounted to 5.83 billion USD, down 15.8 percent year-on-year, while the number of newly approved foreign-funded enterprises stood at 1,265, dropping 13 percent year-on-year. However, both declines were much lower than the respective 33 percent and 48.7 percent recorded in January.

As a matter of fact, China has been the country attracting the most foreign capital of all developing countries for 17 years in a row.

Source: People's Daily Online