For­eign in­vest­ment promis­ing in China

The Pak Banker - - 6BUSINESS -

BEI­JING: For­eign in­vest­ment is still promis­ing in China amid an eco­nomic slow­down with new op­por­tu­ni­ties emerg­ing from con­sump­tion and ser­vice in the do­mes­tic mar­ket, a Xin­hua in­ves­ti­ga­tion has found.

"The clo­sure of low-end ex­port-ori­ented OEM man­u­fac­tur­ers has elim­i­nated out­dated ca­pac­ity and of­fers room for more qual­ity pro­grams," said Fang Jianbo, deputy head of the com­merce bureau of Dong­guan, a south­ern Chi­nese city in Guang­dong prov­ince dubbed as the "world's fac­tory" and a barom­e­ter for the coun­try's eco­nomic changes.

Some 362 for­eign en­ter­prises were shut down or re­lo­cated in 2015, ac­count­ing for 3.3 per­cent of the to­tal num­ber of for­eign firms in the city. Most of the firms were la­bor-in­ten­sive man­u­fac­tur­ers, said Fang.

Mean­while, 440 new for­eign-funded projects were signed last year in the city with a to­tal in­vest­ment of $5.06 bil­lion, up 17 per­cent year on year, mainly in sec­tors of fi­nanc­ing, lo­gis­tics, medicine and high-end man­u­fac­tur­ing, he said.

Eye­ing the vast Chi­nese mar­ket, UMC, a global semi­con­duc­tor foundry, started an in­te­grated cir­cuit man­u­fac­tur­ing pro­gram in Xi­a­men city, east China's Fu­jian prov­ince last year with a to­tal in­vest­ment of $6.2 bil­lion.

There is an ob­vi­ous trend that the OEM firms that only take China as a pro­duc­tion base are strug­gling for sur­vival while those man­u­fac­tur­ers that take China as a sales mar­ket are ex­pand­ing their busi­nesses, said Har­ley Seyedin, pres­i­dent of the Amer­i­can Cham­ber of Com­merce in South China.

About 80 per­cent of its mem­bers pro­vide prod­ucts and ser­vices solely for the Chi­nese mar­ket, up from 23 per­cent in 2003, said Seyedin.

China at­tracted a to­tal of $126 bil­lion of for­eign cap­i­tal in 2015, up 5.6 per­cent over the pre­vi­ous year, with ser­vice and high-end man­u­fac­tur­ing sec­tors at­tract­ing over 70 per­cent of the to­tal, ac­cord­ing to the Min­istry of Com­merce.

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