China ranks as the number 1 attractive destination in the world for foreign direct investment (FDI) in AT Kearney's 2007 FDI Confidence Index survey: a survey of global executives conducted regularly by the management consulting firm AT Kearney. China leads Index rankings for the fifth consecutive year and ranks first among Asian investors - 34 percent of whom plan to invest here in the next three years.
China's rising domestic market has great growth potential and will provide global opportunities, according to Yu Guangzhou, China's vice-minister of commerce.
"The nation's consumer market not only drives its own growth but also propels the global economy," Yu said at the three-day China Development Forum that concluded on March 24 in Beijing.
The Kearney survey report points out that investers from both developed and developing country will continue to cite China as their most preferred destination for initial investment. As an emerging market, China is universally appealing to foreign capital; and will continue to attract investors in high value-added services industries – particularly financial and non-financial services. Additionally, the investment will also pour into the country's booming heavy and light manufacturing industries; and is strongly echoed by respondents from outside Asia who are "highly likely" to invest in China over the next few years.
China has registered the strongest investor optimism for five years in a row. There were more than 280,000 foreign capital enterprises in China by the end of 2007, up 4.14 percent over last year; and the total investment volume amounted to $2.11 trillion, 23.5 percent higher. The first two months of 2008 saw as much as $18.13 billion of actual foreign capital use, an increase of 75.19 percent.
Meanwhile, China is absorbing and using foreign investment based on quality rather than quantity. As a result, "going global, and attracting foreign capital" will better suit sustainable development. Accordingly, the threshold for foreign businesses to enter China's market has been raised to involve more factors, particularly environment-related factors, which are crucial to China's sustainable economic development.
China's GDP expanded 11.4 percent in 2007, making it the world's fourth largest economy. At the same time, the nation's role in the global economy has consistently increased over the years. An earlier forecast made by International Monetary Fund (IMF) said last year, that China was expected to overtake the US as the largest contributor to global economic expansion. China's contribution to global economic growth averaged 13 percent over the past five years.
"With domestic consumption on the rise, the nation's demand for imported products will also increase," said Yu. China's imports have grown at an average of 26 percent annually since its entry into the WTO. The country's total imports ballooned by 3 billion yuan ($425.38 million ) in the first two months of 2008.
China's economy is now shifting to one driven by consumption. In the meantime, the rising purchasing power among Chinese people means a greater demand for high-end products. The flourishing market will translate into even bigger opportunities for overseas enterprises; and breed more mature conditions for foreign investment, Yu observed.
By People's Daily Online
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