In the first 11 months of this year, actual foreign direct investment in China rose 15.61 per cent year on year to total US$41.9 billion, according to the Ministry of Foreign Trade and Economic Co-operation.

Wang Zhile, a senior researcher with the Chinese Academy of International Trade and Economic Co-operation, a ministry think tank, said the total of foreign direct investment in China was expected to see a two-digit rise for the whole year and surpass the previous record of US$45.5 billion from 1998.

Long Guoqiang, a senior researcher with the State Council's Development Research Centre, said he believed that foreign investors' confidence in the market had been boosted in the run-up to China's entry into the World Trade Organization (WTO).

He said the high increase in actual foreign direct investment was also a result of the rapid increase in China's contracted foreign direct investment last year.

Last year, contracted foreign direct investment came to US$64.19 billion, an increase of 47.09 per cent over the previous year, according to the ministry.

Long said the latest increase in actual foreign direct investment marks a turning point in the growth of foreign direct investment in China after years of stagnancy since the 1997 Southeast Asian financial tumult.

He said he expected the increase to accelerate next year, when China starts to fulfil the commitments it made to the WTO.

Investment in China's service sector - including banking, insurance and telecommunications - will rise rapidly after China grants foreign investors greater access, predicted Long.

Wang dismissed the idea that China's WTO member will not affect foreign direct investment flowing into the country. He said such a view underestimates the impact of China's opening-up of the service sector. He said overall investment is also expected to increase in the wake of China's WTO entry.

Between January and November this year, contracted foreign direct investment rose 24.38 per cent year on year to reach US$60.41 billion. In the same time, the ministry approved the setting-up of 22,915 companies with foreign investment, an increase of 16.32 per cent year on year.

Since the State began allowing foreign direct investment in the early 1980s until the end of November this year, China has utilized a total of US$390.52 billion in actual foreign direct investment. A total of 387,260 companies with foreign investment have been set up.

(China Daily December 14, 2001)