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SCMP Reporter

THE evidence that 1992 was a boom year for foreign investment in Beijing is in the city's skyline, which has grown higher almost daily. The statistics simply serve to back it up: last year foreign investment quadrupled.

   After senior leader Mr Deng Xiaoping's call last year for capitalist reforms, foreign businessmen flocked to China.

  Whereas Beijing has in the past been left behind by the southern economic zones, it too is now enjoying an influx of foreign capital. Part of the reason is psychological.

  ''Whether or not it is actually easier to do business here now, we feel that there are more opportunities. Certainly new areas for investment have been opened up in retailing and real estate,'' said one foreign businessman.

  Last year saw the opening of Beijing's first - but certainly not last - joint-venture Western-style department store, the Yansha Friendship Market, with investment from Singapore.

  Luxury office buildings, which in 1990 seemed doomed to remain empty, are now almost all full. There are no longer cut-price deals on office space.

  Beijing's deputy mayor, Mr Zhang Baifa, received so many applications to build luxury housing developments that early this month he decided to call a halt.

  The city now has more than 10,000 villas and luxury apartments with prices hovering around US$700,000 (about HK$5.5 million), most of which have been bought by speculators from Hongkong and Taiwan.

  According to Mr Zhang Mao, deputy director of Beijing's Foreign Economic Relations and Trade Commission, the influx of investors to China is a reflection of recession and political instability elsewhere in the world.

  Beijing had been a conservative place, more concerned with politics than economics. But, Mr Zhang said, that was changing.

  ''Beijing's leaders are beginning to understand foreign investment and to value it,'' he said.

  That is hardly surprising. The output value of foreign invested-enterprises in Beijing reached US$1.81 billion last year. Of more interest to city leaders was that it accounted for 12.9 per cent of the city's tax revenue.

  While Beijing may not be able to compete with places such as Shenzhen, Mr Zhang claimed the better infrastructure and work skills of employees in the capital city made it a good place for investment.

  Dealing with bureaucracy will never be easy in China, but at least in theory procedures for foreign investment have been simplified.

  Production projects involving less than US$5 million can now be approved by the local district government, rather than Beijing's investment commission.

  In the case of service industries, the limit is lower, at US$3 million.

  In 1992, foreign investment was valued at US$1.4 billion, involving about 42 major projects - compared to only two the year before. A total of 2,208 projects were approved, compared to 1,560 in the 12 years from 1979 to 1991.

  Trade was up 12.8 per cent over the year before, worth US$2.16 billion, more than two thirds of it in exports despite the flood of imported consumer goods into the shops.

  Mr Zhang said it was not a flash in the pan: ''There are many factors involved; what US President [Bill] Clinton does, what happens over Hongkong, how trade and investment policies change with Taiwan - but right now it looks as though we will be able to keep up quite a high speed of development.''   In January this year alone, one billion yuan (HK$1.3 billion) was invested in Beijing, outstripping last year's figure for that month.

  Hongkong companies are the biggest investors in the city, making up 45 per cent of the total.

  Japan is next, but a long way behind, with 18 per cent, and the US is third, with 15 per cent.

  Whereas most foreign-invested enterprises used to be production-oriented, they are moving increasingly into service industries.

  Last November, Beijing held its first trade fair in Hongkong.

  Now the government is eager to open up new areas for foreign investment, particularly energy, infrastructure, and banking, which has been under the central control of the State Council.

  ''I hope this year,'' said Mr Zhang, ''will see the first contracts signed on hospitals and education.''   Both are potentially lucrative areas for foreign investors as people become increasingly dissatisfied with state-run education and health care.

  Both sectors are in need of money which the state cannot or will not provide, and as a result are demanding unreasonable fees from patients and pupils.

  People are willing to pay for a good education for their children, and already, Chinese-funded private schools are attracting students. A joint-venture school with good foreign-language teaching, which is the passport to success in China, would likely make a fortune.

  One area unlikely to be opened up is media.

  ''We are making films with Hongkong companies,'' said Mr Zhang, ''but broadcasting and the press will not be opened up, because these things are basically run by the government.''   Statistical profile Area: 16,800 square kilometres. Under the Beijing municipality, there are 10 districts and eight counties. Population: 10.45 million. Foreign investment in 1992: US$1.47 billion, 4.2 times increase over the previous year. Total overseas investment since 1979 is US$3.95 billion. By the end of 1992, 3,769 foreign invested enterprises have been approved. They are from more than 60 countries, with investors from Hongkong, the US, Japan, and Taiwan leading the field. The city's gross industrial output in 1992 was 103.78 billion yuan, a 16.3 per cent increase over the previous year. Gross industrial output value of foreign-funded enterprises in 1992 was a 10 per cent-plus rise over the previous year.



Beijing finally gets taste of Deng's revolution