China's level of foreign investment inflow for the first seven months of 2003 continues to impress, despite a predictable slowdown due to the potentially fatal SARS virus.

The Ministry of Commerce Wednesday said 22,245 foreign-invested enterprises (FIEs) were established from January to July, up 19.30 per cent year-on-year.

In addition, contracted investments reached US$59.17 billion, up 33.96 per cent over the same period last year, while the actual foreign direct investment (FDI) amounted to US$33.35 billion -- an increase of 26.63 per cent.

In the first six months of the year, the growth rates of newly established FIEs, contracted FDI and actual FDI were 22.3 per cent, 39.07 per cent and 32.87 per cent, respectively.

Long Guoqiang, deputy director of the Foreign economy Research Department at the State Council's Development Research Centre, said the figures showed the slowdown for a solitary month was not a precursor of what to expect for the entire year.

He said the impact of SARS, or severe acute respiratory syndrome, which broke out in China in mid-April, was the reason for the July slowdown.

But Long said: "The impact of SARS is only really starting to show as it only becomes evident two or three month after the actual event.''

However, he does not believe SARS will cause much of a difference to the whole year's FDI inflow, as China's attractiveness to foreign investors due to its huge market, cheap labour and high-quality personnel will not change.

"SARS has only so far postponed some investment and most of it will still continue to come,'' he added.

Previously, the State Information Centre predicted that the country's FDI could hit US$60 billion for the year.

Long said the determination of the new Chinese leadership in fighting the flu-like disease will strengthen foreign investors' confidence in the stability of government policy and its commitment to carrying reforms.

By July, China had 446,441 foreign invested enterprises with US$887.23 billion in contracted investments and US$481.32 billion in actual investments, Ministry of Commerce statistics show.

Also yesterday, the ministry said China's foreign trade in high-tech products grew by more than 50 per cent over the same period last year to US$114.37 billion in the first seven months of 2003, accounting for 25.4 per cent of all foreign trade -- including US$61.42 billion in exports and US$52.95 billion in imports.

High-tech exports in July reached a record high of US$9 billion to US$9.02 billion with more than 60 per cent increase year-on-year, while imports rose by 42 per cent to US$10.47 billion.

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