Investment Updates News
- Foreign direct investment rises 12% to US$15.9b
Date: 13-Apr-2007 Sources: (Shenzhen Daily)
FOREIGN direct investment in China rose 12 percent to US$15.9 billion in the first quarter of this year as the attractions of low manufacturing costs and the world's biggest pool of consumers outweighed pending tax increases.
The Ministry of Commerce issued the figures on its Web site Thursday. At that pace, investment may match or top last year's record of US$63 billion.
Higher taxes for foreign companies will be phased in over five years starting next January. That hasn't deterred Anheuser-Busch Cos., the world's second-biggest brewer, from expanding its manufacturing operations to sell more Budweiser and Harbin beer in China. Disposable incomes are rising more than 10 percent a year in the country of 1.3 billion people.
Foreign companies increasingly view China as a market, instead of just a production base, Ha Jiming, chief economist at China International Capital Corp., an investment bank, said in Beijing. 'They're attracted by rising purchasing power.''
China's economy last year grew 10.7 percent, the fastest pace in 11 years. Foreign direct investment rose 4.5 percent, helping to boost the country's currency reserves to a world record US$1 trillion.
New York-based PepsiCo Inc., the world's second-largest soft-drink maker, and its partners plan to double their China workforce to 30,000 people over five years, chief executive officer Indra Nooyi said two weeks ago.
St. Louis-based Anheuser-Busch plans to add a plant in Guangdong Province. The brewery, set to be completed in late 2008, will cost US$63 million, the company said.
Higher taxes won't deter investment, according to the government and the American Chamber of Commerce in China. The country's attractions include healthy growth, a vast market and the labor pool, Finance Minister Jin Renqing has said.
Foreign and local companies will eventually pay the same tax rate, 25 percent. Existing rates are 15 percent for overseas companies and 33 percent for local businesses.
Foreign direct investment has surpassed US$700 billion since China began accepting overseas' investors money, Commerce Minister Bo Xilai said last month.
Per-capita disposable incomes in towns and cities increased 12.1 percent last year, while rural incomes rose 10.2 percent.
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