FOREIGN-FUNDED enterprises have invested a total of US$2.11 trillion in China as at the end of last year, a jump of 23.5 percent year on year, the State Administration For Industry and Commerce has said on Tuesday.
The cumulative total dates back to 1978, when China began its reform and opening-up policies.
Also during that period, a cumulative total of 286,200 foreign-funded companies were approved to invest in China, up 4.14 percent year on year. In 2007 alone, the number was 37,888, down 8.69 percent from 2006. In January this year, China approved 2,918 foreign-funded companies, down 13.41 percent on year.
Foreign-funded companies will find the environment more competitive as a result of tax changes. The new corporate tax law that took effect on January 1 unified the income tax rate for domestic and foreign companies at 25 percent. Previously, Chinese companies paid 25 percent tax rate and foreign enterprises were charged 15 percent.
Although fewer foreign companies were approved, those that have come to China recently are larger, with an average registered capital that rose 28 percent to US$4.63 million in 2007. The average registered capital for all foreign companies increased 17.23 percent to US$4.04 million.
SAFIC also highlighted other trends of foreign investment:
The number of foreign-invested real estate firms rose only 2.1 percent to 14,700 last year.
No foreign investment projects in the steel, cement or electrolyzed aluminum sectors have been approved since 2005. These are sectors that China is seeking to restructure.
The lion's share of new foreign firms are in the manufacturing sector.
Wholesale and retail enterprises were the second-most common type of foreign projects, attracting 20,000 firms, a rise of 26.49 percent on year.
Foreign-funded banks grew rapidly last year, as 18 of them have been locally incorporated.