FDI jumped by 13% to US$60.6b last year
By Xing Cheng (China Daily)
Updated: 2005-01-14 00:00

The flow of foreign direct investment (FDI) to the Chinese mainland increased by nearly 13 per cent to US$60.6 billion last year, according to statistics from the Ministry of Commerce.

The figure indicated most foreign investors shrugged off fears that the economy, which remains overheated in some sectors, will have a hard landing.

The ministry said the data showed that industries such as equipment manufacturing and electronic machinery are the hottest areas.

Foreign companies had set up 700 research and development centres on the mainland by the end of last year, said Chong Quan, the ministry's spokesman, adding that 30 multinationals had also chosen the mainland for their regional headquarters.

Though the country's economic cooling measures did not affect foreign investment generally, Chong said actual FDI in some overheated industries slowed.

The number of newly approved foreign-funded companies in the steel industry fell by 53 per cent, while contracted investment dropped 9 per cent.

Actual and contracted foreign investment in the cement industry sunk 67 and 74 per cent respectively. No foreign investment was made in the aluminium industry last year.

Chong said Northeast China has been the driver of FDI inflow.

Actual and contracted investment increased by 78 and 40 per cent respectively in the region, where the central government is currently engaged in a strategy of rejuvenation.

Hong Kong, the British Virgin Islands, South Korea, Japan and the United States were the top FDI investors.

The ministry did not release data for December, but by comparison, actual FDI that month reached about US$3.1 billion, a fall of more than 51 per cent year-on-year.

Contracted investment in December rose 26.7 per cent to US$18.4 billion.

But December's drop in actual foreign investment does not hint at a slowdown in FDI inflow next year, as foreign companies are usually reluctant to make investments at the end of the year, said Jin Bosheng, an expert from the Chinese Academy of International Trade and Economics.

"Momentum remains robust," Jin said.

The contracted foreign investment figures show lots of money is waiting to flow into China, he said.

Total contracted FDI reached US$153.5 billion last year, up 33.4 per cent year-on-year.

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