BIZCHINA / Top Biz News
Financial industry key focus for FDI
By Jiang Wei (China Daily)
Updated: 2006-06-09 07:06
The financial industry is a major destination for foreign direct
investment (FDI) because of the opening-up of the sector, according to
Vice-Minister of Commerce Ma Xiuhong.
The financial sector including banking, insurance and securities has
become a new growth area for foreign investment flowing into the country,
Ma said.
Her remarks were based on revised statistics of actual foreign direct
investment in 2005.
When the ministry first released the figure in January, it estimated
actual foreign investment in China stood at US$60.33 billion last year,
0.5 per cent down from 2004. But investment in the financial sector was
not included.
The actual FDI was finally revised to US$72.4 billion, reflecting a hefty
growth of nearly 20 per cent on the previous year.
"We revise the (FDI) figure every year but in the past there were just
small revisions so they didn't attract too much attention," Ma explained.
She added that before 2004, foreign investment in the financial sector
was less than US$2 billion each year.
She said the increase in financial investment resulted from the
continuous opening-up of the sector and reforms within it.
Upon entry to the World Trade Organization (WTO) in 2001, China committed
itself to gradually opening its financial industries such as banking,
securities and leasing markets to foreign investors.
FDI in the manufacturing sector is expected to level off in the coming
years while that in the financial sector has just begun. Ma said the FDI
growth rate in the first five months is expected to keep the same pace as
the period from January to April.
According to ministry data, China attracted US$18.4 billion in actual
foreign investment in the first four months of the year, up 5.7 per cent
on the previous year. The government approved 12,639 new foreign-invested
companies during this period.
"We found that the financial and services sectors remain a hotspot for
investment flows," Ma said. "But foreign investment to industries
involved in high-tech production still account for a large proportion."
Ma noted that China's outbound investment has also grown rapidly this
year. Direct investment outward skyrocketed by 280 per cent year-on-year
to US$2.68 billion in the first quarter of this year.
"Investment is not only flowing to developing countries but also to
developed countries," Ma added.
In order to promote both inward and outward investment, the commerce
ministry is scheduled to hold the 10th China International Fair for
Investment and Trade on September 8.
Since being launched in 1997, the event has helped more than 10,000
investment co-operation projects to get off the ground, with a total
value of US$ 60 billion.
The fair this year is expected to include more than 100 organizations
from both home and abroad, and see 20,000 co-operation projects.
(China Daily 06/09/2006 page9)
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