For­eign firms still look­ing to the east

The well- de­vel­oped in­fra­struc­ture in the coastal area, with its dense trans­porta­tion net­work and sup­port­ing in­dus­trial fa­cil­i­ties, has been a strong draw for global in­vestors, as Li Ji­abao re­ports

China Daily (Hong Kong) - - BUSINESS -

De­spite ris­ing costs in re­cent years, China’s east­ern re­gion re­mains a strong at­trac­tion for for­eign in­vestors, thanks to its well- de­vel­oped in­dus­trial fa­cil­i­ties and in­fra­struc­ture, as well as easy ac­cess to the do­mes­tic mar­ket, busi­ness­men said. “Back in the 1990s, we saw China as an im­por­tant la­bor force. But now China’s our con­sumer mar­ket as well as a tal­ent pool,” said Li Chengchun, vice- pres­i­dent of Sam­sung Elec­tron­ics ( Suzhou) Semi­con­duc­tor Co Ltd.

“China re­mains our top in­vest­ment desti­na­tion, al­though we don’t ex­clude the pos­si­bil­ity of in­vest­ment in South­east Asia to take ad­van­tage of the la­bor force.

“As for high-end in­dus­tries, China, es­pe­cially the east­ern re­gion, still has great scope for de­vel­op­ment,” Li said.

He added that busi­ness in the Chi­nese mar­ket had shown the fastest growth in re­cent years among the South Korea-based elec­tronic gi­ant’s ma­jor mar­kets.

At the same time, the Chi­nese gov­ern­ment’s move to raise house­hold in­comes has been un­leash­ing con­sumer de­mand.

The Sam­sung fac­tory was es­tab­lished in 1994 in Suzhou, Jiangsu prov­ince. Suzhou is about 80 km north­west of Shang­hai, an eco­nomic hub con­nect­ing sev­eral cities via a net­work of high­ways and high­speed rail­ways.

China was the world’s sec­ond-largest re­cip­i­ent of for­eign di­rect in­vest­ment last year. Sta­ble FDI in­flows play an im­por­tant part in the healthy de­vel­op­ment of the world’s sec­ond-largest econ­omy.

The na­tion’s non-fi­nan­cial FDI in­flows edged down 3.7 per­cent year-on-year to $111.7 bil­lion in 2012, amid an 18 per­cent de­crease in global FDI.

In the Jan­uary-Oc­to­ber pe­riod this year, non-fi­nan­cial FDI in­flows to China went up 6.2 per­cent from a year ear­lier to $88.6 bil­lion, ac­cord­ing to the Min­istry of Com­merce.

Dur­ing that pe­riod of 2013, non-fi­nan­cial FDI in the east­ern re­gion went up 5.6 per­cent to $74.2 bil­lion, about 83.7 per­cent of the coun­try’s to­tal.

For­eign in­vest­ment in the cen­tral re­gion rose 12.3 per­cent to $7.84 bil­lion, ac­count­ing for 8.8 per­cent of the to­tal, while FDI in the western re­gion in­creased al­most 6.1 per­cent to $6.6 bil­lion, mak­ing up 7.4 per­cent of the to­tal

Timo Jo­hans­son, gen­eral man­ager of UPM (China) Co Ltd, the Chang­shu, Jiang­sub­ased sub­sidiary of a Fin­nish pa­per maker, said: “In China, pa­per use is still grow­ing, and that’s ex­pected to con­tinue. Mean­while, the pa­per busi­ness is de­creas­ing in the Euro­pean Union.”

“We plan to in­crease in­vest­ment in China. Our busi­ness in China serves the whole Asian mar­ket.

“Al­though la­bor costs are ris­ing about 10 per­cent each year, we are more fo­cused on the mar­ket po­ten­tial and, most im­por­tantly, peo­ple are skilled here,” Jo­hans­son said.

“Hu­man re­source costs not only in­clude wages, but also whether you can get suit­able em­ploy­ees,” Jo­hans­son added.

Im­proved re­search and de­vel­op­ment fa­cil­i­ties in the east­ern re­gion have helped to in­crease in­vestors’ in­ter­est.

“In view of the huge mar­ket size of China, we have a slo­gan:

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