China Information

Wednesday, January 10, 2007

Report Says Quality of Foreign Investment Must Be Urgently Improved

Foreign trade of foreign-invested enterprises is an important part of China’s foreign trade, and a main source of China’s trade surplus. The Center of Forecasting Science of Chinese Academy of Sciences points out recently in a research report that the future trend of foreign direct investment may directly affect the scale and structure of China’s foreign trade, and the quality of foreign investment in our country should be urgently improved.
The report entitled “Analysis and Forecast of China’s Import & Export Situation in 2007” shows that foreign direct investment in China has the following characteristics: export-oriented foreign direct investment still accounts for a big proportion; too much foreign direct investment flows to manufacturing, which is not conducive to the development of China’s service industry; the change of source composition of foreign direct investment is not optimistic – the investment amount of the 10 countries (regions) from Asia and the US is declining; and investment from some free ports goes up, increasing financial risks.
The report suggests that foreign enterprises should be encouraged to engage in more general trade in their foreign trade to change the mode of trade growth, that more foreign direct investment should be directed to the service sector to promote the optimization of industrial structure, and that speculative investment should be restricted to ward off financial risks.


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