China is expected to remain a magnet for overseas funds, attracting more than US$33 billion in foreign capital so far this year.

Zhang Hanya, secretary-general of the China Investment Association, said in Beijing on Saturday that overseas investment has been a driving force in China's economy over the past 20 years. In 2002, China ranked first in the world in attracting overseas investment. Despite the impact of SARS in spring, foreign capital is still flowing into China, Zhang said at the sixth Beijing International High-Tech Expo.

Ministry of Commerce's new statistics show that in the first seven months this year, foreign direct investment in the country was US$33.3 billion, up by more than a quarter over the corresponding period last year. China is expected to use US$60 million in foreign funds in real terms this year.

Lin Zongtang, president of the China Industrial Economic Federation, said several factors will support the growth of foreign investment.

According to Lin, China will gradually open its banking, telecommunications, trade and tourism sectors to foreign investment and encourage overseas business to join in the restructure of China's state-owned companies. These policies will provide foreign investors with huge opportunities to enter China, he said.

More foreign investors have become aware of China's potential. They have been encouraged to invest in agriculture, manufacturing, and high-tech industries.

China has invited foreign companies to set up research institutes, manufacturing and technology development bases, and regional headquarters. They can co-operate with their Chinese counterparts to upgrade or develop key technologies.

Participants from all over the world have brought more than 3,000 investment plans to the expo in Beijing, according to He Hualong, vice-chairman of the China International Economic and Technological Co-operative and Promotion Association.

 "It has become a major opportunity for those investors with the foresight to enter the Chinese market,'' said He.

More than 400 of the top 500 multinationals have set up companies in China. By July 2003, China had approved 446,441 new overseas-funded companies. They were backed up by contractual overseas funds of US$887.2 billion, or US$481.3 billion in real terms.

Economists agree that China's entry into the World Trade Organization has sped up its reform and opening up process. Work on improving its legal system and market mechanisms will also provide a better environment for overseas investors.

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