Foreign investment structure in China more reasonable: minister

The foreign direct investment (FDI) structure in China this year has become more reasonable, and it is natural to witness FDI drop in some years, Chinese Minister of Commerce Bo Xilai told the People's Daily in an interview, which was published on Friday.

China's actual FDI dropped slightly in the first 11 months of 2005, down 1.9 percent to 53.1 billion U.S. dollars, statistics released by the Ministry of Commerce showed.

According to figures, except September, actual FDI has been falling since April in comparison with the same months of last year, with a two-digit slump in the April-June period, which was rare in recent years.

Bo attributed the drop of actually-used FDI to the appreciation of Renminbi, fierce international competition in attracting FDI, and more objective statistics in China.

The country's FDI quality rather than quantity should be emphasized, he said.

"More FDI has been flowing to service industry, which is expected by the government when taking macro-control policy," the minister said.

The actually-used FDI in China this year is estimated to reach 60billion U.S. dollars. In the first three quarters, the output of foreign-invested enterprises totaled 1,439.7 billion yuan (180 billion U.S. dollars), accounting for 29 percent of the country's industrial output, according to Bo.

Those foreign-funded enterprises handed over tax worth 475.4 billion yuan during the three quarters, accounting for 20 percent of the country's total, and employees in foreign-funded enterprises accounted for 10 percent of the total urban employees, he said.

Thanks to successful attraction of FDI for years, China has become a major manufacture country in real sense, but its own investment in other parts of the world is still quite limited, he said.

China, with forex reserve of more than 700 billion U.S. dollars, is now qualified to increase investment in foreign lands, he said.

In the first eleven months this year, the FDI volume from China reached 5.6 billion U.S. dollars, up 72 percent, figures from the Ministry of Commerce showed.

During the period, the business volume of China's contracted projects in other countries and its labor export volume reached 17.8 billion U.S. dollars and 4.1 billion U.S. dollars, up 23 and 31 percent respectively.

China was the third largest FDI receiver in 2004, only after the United States and Britain, according to official statistics.

During the January-November period this year, the number of newly foreign-funded enterprises came to 39,679, up 1.17 percent year-on-year, with the contractual foreign funds of 167.21 billion U.S. dollars, an increase of 23.99 percent over the same period of 2004, figures from the Ministry of Commerce showed.

The top 10 investors included Japan, the Republic of Korea, the United States, Singapore, Germany and China's Hong Kong and Taiwan regions.