| Overseas
Investment Assists Economy Liu Jie |
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China used a total of US$230 billion of foreign capital from 1996 to 1999, which helped push forward the economy, according to official statistics. The figure is expected to hit US$290 billion by the end of 2000, an increase of US$130 billion over the eighth Five-Year (1991-95) Plan period. Experts attribute this rise to the central government's "active, rational and efficient" policies to use foreign funds, a favorable investment climate in China and infrastructure upgrading. Improvements in the legal system, efficient government administration and overseas investors confidence in China's political, social and economic developments have also been attributed to the rise. Direct foreign investment and loans from overseas financial institutions reached US$184.5 billion and US$46 billion respectively during the first four years of the ninth Five-Year Plan (1996-2000). These figures are expected to hit US$230 billion and US$57 billion for the whole of this period. This will represent growth of 100 percent and 25 percent respectively compared to the last five-year plan period. In addition, from 1993 to 1999 annual foreign investment in China was the highest among all developing countries. Preferential loans from the World Bank, the Asian Development Bank and various foreign governments have helped develop China's agriculture, water conservation, transport systems, energy development, urban infrastructure and environmental protection. About 65 percent of this has been used in the relatively undeveloped central and western regions. Thanks to new regulations during this period, foreign capital has gone into new developing fields, such as finance, tourism, commerce and insurance. For example, by the end of 1999, 13 overseas-funded and joint venture banks and 157 branches of foreign banks were carrying out business in China as restrictions on their activities were eased. Foreign capital was used well during the last five years as more funds were invested in manufacturing and high-tech industries. Less money was spent in real estate, with 61.5 percent of investment spent in the previous areas and 10.1 percent in the latter in 1999. Investors appeared to prefer high-tech companies, such as Huanhong Electricity, Chongqing BP Chemicals and Zhenjiang Asia Paper Plant. The world's leading multi-national firms have also played an active role in China in the last few years. Among the world's top 500 companies, around 400 have invested in the country. During the ninth Five-Year Plan period, various schemes to attract investment were introduced, including build-operate-transfer (BOT) projects, stock issues at home and abroad and bond issues. Attracting foreign capital has helped the healthy and rapid development of the economy and the smooth implementation of the country's ninth Five-Year Plan. (China Daily 09/27/2000) |
