Forecast puts investment inflows at up to US$50b
Mark O'Neill in Beijing
China's Minister of Foreign Trade and Economic Co-operation said yesterday the country could attract US$45 billion to US$50 billion in foreign investment this year despite a global drop in spending, but he was more bearish on trade.
On the sidelines of the annual session of the National People's Congress, Shi Guangsheng said: 'China remains one of the best choices for foreign investment. We are the safest place, with a good legal environment and good workers and a very big market. The figure could reach US$45 billion to US$50 billion this year.'
Last year, the figure for actual investment was US$46.8 billion, an increase of 14.9 per cent over 2000, according to official figures. Economists expect China's entry into the World Trade Organisation will be a major factor in persuading foreign firms to invest.
Asked about the debate in Taiwan over whether its manufacturers of eight-inch silicon wafers for computers should be allowed to invest in China, Mr Shi said the decision should be left up to the companies and that the Government should not interfere.
'If the makers do not come, investors from other countries will and the Taiwan firms will lose the market,' he said.
Opponents argue that Taiwan must retain key industries or become politically subject to the central Government.
Asked about the prospects for foreign trade, Mr Shi said the external environment was worse than in 1997 and 1998, when there was a regional slowdown.
'Now it is major economies in the world that are slowing down or are on the brink of recession. It is very difficult to predict this year,' he said.
'It is hard to tell if the US will recover. There are many variables. We must diversify our markets, increase our exports and improve our quality.'
In the first two months of this year, China's exports were US$40.4 billion, up 14.1 per cent compared with the same period last year, and imports were US$34.9 billion, up 3.2 per cent. Overall, exports last year were US$266.2 billion, up 6.8 per cent, and imports US$243.6 billion, up 8.2 per cent.