China attracted US$24.58 billion in overseas direct investment during the period from January to June this year, Vice-Minister Ma Xiuhong of Foreign Trade and Economic Co-operation (MOFTEC) told reporters on Thursday in Hong Kong.

In June alone, a staggering US$7.66 billion was invested.

In the meantime, contracted overseas direct investment stood at US$44 billion, a rise of 31.5 per cent from the previous year. "Efforts made by the Chinese Government such as promises to break trade and tariff barriers since it gained WTO membership have bolstered the confidence of overseas investors," Ma said.

Chinese mainland's cheap workforce and stable economic and political landscape have long made it a favoured destination for overseas capital.

Ma pointed out that about 15,155 overseas-invested firms were set up in the six months, up 26.4 per cent from the previous year. Nearly a third were Hong Kong-funded. "Based on the actual utilization of overseas investment funds, Hong Kong continues to be the No 1 investor in the Chinese mainland," the vice-minister said.

Figures indicate Hong Kong accounted for 46.5 per cent of the accumulated overseas direct investment in the mainland, totalling US$419.8 billion by the end of June. Hong Kong businesses also accounted for nearly US$8.2 billion of actual investment and US$12.3 billion of contracted investment in the first six months of this year.

"The optimized business environment after China's World Trade Organization (WTO) entry continues to be the main reason for increasing overseas investment," said Professor Lu Jinyong with the University of International Business and Economics.

He believes that the adjustment of related government policies according to China's WTO commitment has widened the range for overseas investment, such as the gradual opening of China's services sectors and increasing attention on high-tech industries.

"Meanwhile, the promulgation and revision of related laws and regulations are also conducive to boosting overseas investment by ensuring a sound legal environment," he said.

The vice-minister Thursday also revealed that China's exports topped US$142.12 billion and imports hit US$128.52 billion in the first half of the year, representing a rise of 14.2 per cent and 10.3 per cent respectively. The total trade rose 12.3 per cent from January to June. China's January to May exports rose 13.2 per cent while imports were up 10.9 per cent, according to earlier figures.

"The recovery of the international business climate is conducive to China's exports," said Li Yushi, deputy director of the Chinese Academy of International Trade and Co-operation.

(China Daily July 12, 2002)