World's Investors Turn Their Attention to China

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Last updated at: (Beijing Time) Friday, November 22, 2002

World's Investors Turn Their Attention to China

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The global economic slowdown has led investors to tap the burgeoning Chinese market, and it seems the tide will probably continue.

Steve Forbes, president of Forbes Co., Ltd., is one of the international figures who are in this view.

Forbes said the recently-concluded National Congress of the Communist Party of China was a clear indicator that the Chinese policies of opening-up and financial and banking reforms will continue to move forward, providing even more development space for private enterprises.

These indicators, which point to a bright future for the Chinese economy, are making it amazingly attractive to investors, he said at the World Capital Forum which closed Thursday in Nanjing, capital city of Jiangsu Province.

Liu Hongru, chairman of the China Capital Market Association, said the country has drawn up a blueprint for building a well-off society in an all-round way, which means more opportunities for cooperation between Chinese parties and foreign investors in a wide range of fields.

Statistics show China attracted 510.8 billion US dollars of foreign investment between 1990 and 2001, including 378 billion US dollars of foreign direct investment.

In his report to the Party congress, President Jiang Zemin pointed out that during the first 20 years of the 21st century, China will concentrate on building a well-off society benefiting all people. To this end, more foreign investment will be utilized more wisely, especially medium- and long-term investments.

Michael D. Donahue, chairman of US-Asia Capital Association, said at the forum, "China represents the largest opportunity in the world for investing in growth and the future, and US investors will be increasingly interested in making these investments."

The private sector will have tremendous development space since the national economy is growing fast and US investors have found business opportunities in various industries in the country, he said.

The influx of investment is demonstrating the attractiveness of China's rapid economic growth to the world, and Chinese cities are able to attract more investment as the impetus for the development of enterprises, said Forbes.

China's economy expanded dramatically between 1978 and 2001, with a growth rate about 6.1 percentage points above the world average. It is estimated that the national economy will grow 7.8 percent this year.

More than 400 of the world top 500 companies have invested in China, in fields ranging from manufacturing to high technology.

Joseph Melone, board chairman of Global Financial Group, said China's process of opening up to the outside world is critical to realizing its full potential and its full impact on the rest of the world.

According to him, China's most attractive factor is its comparatively low labor costs, but salaries and income will surely increase, which will stimulate consumption and help maintain economic development.

Forbes, for his part, holds an optimistic view with regard to Chinese enterprises. He said millions of Chinese are starting their own businesses, which are likely to become an important pillar of the national economy, and they need investment to expand.

Ken Hagerty, president of the Global Venture Investors Association, suggested China further regulate the venture capital market, noting the importance of venture capital to new enterprises, particularly in emerging sectors of the economy.

He explained that an economy's growth rate is a function of the growth of its labor force, plus its rate of productivity improvement. These two economic motors are optimistic indicators of China's future growth rate, particularly if the legal, regulatory and administrative processes are designed to unleash the productivity potential of the private sector.

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