Wednesday, November 22, 2006

BVI Again the Second in the Chinese Foreign Direct Investors Rating

The Ministry of Commerce of China has announced on last Wednesday that realized foreign direct investment (FDI) on the territory rose in October, after the slight decline which took place in the previous months and was the result of the changes in legislation about acquisition of Chinese companies by foreign investors.

In October the amount of foreign direct investments grew 16% to US$5.99 billion, and 3,047 foreign-invested ventures were approved. From January to October, the country attracted US$48.58 billion in FDI – up 0.34% if compared to this period of 2005. During the same period 33,068 foreign-invested enterprises were approved, down 6.32% from the previous year. The amounts of contracted FDI were not revealed in the report.

From the Ministry's report it also becomes clear that the British Virgin Islands continue to keep their position of the second largest foreign investor in China. The 2nd leading position of BVI has been already confirmed in the first two quarters of the year 2006, each time China published the updated information on FDI. The first place is with Hong Kong – the Special Administrative Region of China.

In the current report, Hong Kong remains the first among the foreign direct investors, and it is followed by the British Virgin Islands and Japan.

Gao Hong, a researcher from the Chinese Academy of Social Sciences, has said that the total FDI amount, compared to the last year, increased very slightly, but the average value of each investment rose a lot. This is probably the result of Chinese government's policy of paying more attention to the quality of foreign investments than to the quantity.

Investment flows to the financial sector, which have been a major destination of FDI since last year, were not included in the figures released by the commerce ministry.

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