/24-7PressRelease/ - Hong Kong, September 11, 2008 - Foreign direct investment (FDI) grew 44.54% year-on-year to US$60.724 billion in the first seven months of 2008, a report carried on financial consultancy Zetland's website says.
With China's successful hosting of the Olympic Games, the opportunity for more investment from around the globe also increased. More than 80 foreign heads of state attended the opening ceremony and many more business people were in Beijing to size up China's domestic market, as well as watch the Games.
Overseas investors have started investing in high-tech and service industries in China, compared with an earlier tendency to invest mostly in manufacturing sectors, some analysts say.
"If China's accession into WTO turned the country into a vast reservoir for direct investment by manufacturers around the world, then the Beijing Olympics will usher in another influx of foreign investment by services such as commerce, finance and travel from around the world," a special report in the China Daily notes. "It is a powerful trend that cannot be stopped."
According to China's Ministry of Commerce, from January to July 2008 the number of new approvals for foreign-funded firms declined 22.15% from the same period last year to 16,891. In July alone, the number of newly-approved foreign-funded firms dropped 21.58% from a year earlier to 2,347, and actual use of foreign direct investment rose 65.33% year-on-year to US$8.336 billion.
The increase in FDI and the decrease in the number of overseas-funded businesses firms suggest the average foreign direct investment used for single projects had increased significantly. However, the high FDI may also indicate substantial hot-money inflows, and the government will continue to be vigilant, the ministry says.
Since the transitional period following China's accession into the World Trade Organization (WTO) ended, the country's logistics, telecom and finance sectors have opened up, and many well-known foreign companies have moved in.
China's unmatched profit potential has been irresistible to foreign investors. Reform and opening-up have given China three decades of sustained economic boom, and one of the driving forces behind this explosive development has been foreign investment.
The report is one of many compiled each month on Zetland's comprehensive website.
Established in 1987, Hong Kong-based Zetland Fiduciary Group's professional consultants tackle a range of business issues - from investment opportunities to jurisdictional changes in legal, tax and accounting matters - for clients around the globe.
About Zetland Financial Group Limited
The Zetland Financial Group - http://www.zetland.biz - provides the offshore investor with fiduciary Services, investment management and corporate advisory services, offering personal service and professional advice with total confidentiality.
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