China's stock of foreign direct investment not high

A report released by China's State Council's Development Research Center says the stock of foreign direct investment (FDI) in China accounted for around 18 percent of its annual GDP at the end of 2003, well below the world average of 27 percent.

"It's an exaggeration to say that because it attracts large amounts of foreign capital, China has reduced development opportunities for other countries," says the report, submitted to the 2005 China Development Forum, a two-day forum that opened here Sunday.

The report says China actually used a total of 562.1 billion US dollars of foreign capital at the end of 2004.

"If we take into account of the termination of some foreign-funded businesses, depreciation of assets and the withdrawal of foreign capital in some joint ventures, the stock of FDI in China amounted to 260 billion dollars at the end of 2003," the report says.

The report also says that since 1978, China has approved the establishment of 509,000 foreign-funded businesses, 230,000 of which are still operating.

"That's more proof that the level of FDI stock in China has been overestimated," the report says.

China has been the largest FDI recipient among developing countries for 11 consecutive years, but has never before released statistics of its FDI stock. International organizations have beenusing the aggregate actual use of foreign capital to estimate the FDI stock in China.