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FDI growth underlines a strong foreign interest

Updated: 2011-09-16 08:58

By Ding Qingfen (China Daily)

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BEIJING - China's foreign direct investment (FDI) in August continued its double-digit growth, rising 11 percent from a year earlier to $8.4 billion and underscoring foreign companies' interest in the world's second largest economy.

"China's attractiveness as a destination for foreign investment is still strong, and continues to be," said Wang Zhile, director of the research center for transnational corporations under the Ministry of Commerce.

"The huge consumption market, improving foreign investment environment and competitiveness of local workers will continually drive inflows of foreign investment into China," he added.

From January to August, the country's FDI surged 17.7 percent to $77.63 billion.

The ministry also approved the establishment of more than 18,000 foreign-invested companies, up 7.7 percent.

Coca-Cola, the world's largest soft drinks company, announced in August it would add another $4 billion in investments over the next three years in China starting from 2012. That is in addition to the $3 billion announced in 2009.

Minister of Commerce Chen Deming said recently that China's foreign investment environment will continue to remain competitive in the long term thanks to good infrastructure and labor resources, despite the nation facing new challenges like higher labor costs.

Chen said China will further improve the investment environment, including providing equal treatment for foreign companies with their local counterparts, coming up with innovative ways of attracting FDI and widening the area for FDI.

In April 2010 the State Council issued new FDI development guidelines, which encouraged foreign companies to invest in China through mergers and acquisitions.

Three rules linking government procurement to indigenous innovation by domestic firms were scrapped in July this year, giving foreign firms better access to the domestic market.

The United Nations Conference on Trade and Development said in July that China is and will continue to be the most attractive market for foreign investors in the next two years.

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