China is not regarded globally as a place for mainstream foreign direct investment (FDI) and its current FDI only accounts for just over 2 percent of the entire word's volume, reveals Ma Yu, Foreign Capital Department's chief with the Ministry of Commerce's Research Institute.

Overseas Chinese capital makes a major contribution to foreign investment in China. FDI from developed countries accounts for 80 percent of the entire world's volume, but only a very meager portion reaches China; standing for less than 20 percent of the country's registration.

China's status as an FDI destination has weakened. In the mid 1990's, FDI in China comprised for 11.8 percent of the world's volume. This figure has declined to 5 percent currently, while those from developed countries have dropped to 13 percent in 2008 from around 30 percent a decade ago.

These years China absorbs foreign capital chiefly through new investments, while the M&A is still in relatively small scale, accounting for 3 percent of the entire foreign investment, and the transactions were mostly below US$5 million.

Ma Yu indicates that the present status of China's economy allows for much room for M&A, so the market should be more broadened, particularly in terms of monopolized trades. Meanwhile, the investment environment should be perfected as well, to facilitate future foreign investments.

For more information, please consult the original coverage in Chinese at:

http://paper.cs.com.cn/html/2009-06/29/content_21892456.htm

(China.org.cn by Maverick Chen, June 29, 2009)