China's realized foreign direct investment (FDI) increased
nearly 13 percent year-on-year from January to July, driven by
rapid growth in the real estate, stock and forex markets.?
The country received US$36.93 billion in FDI in the first seven
months of this year, up 12.92 percent from a year earlier, the
Ministry of Commerce said yesterday. It approved 21,676 foreign
enterprises in this period, down 4.81 percent from last year.
Foreign investors are expected to set up more operations in
China this year, in particular in the second half, to avail the
last opportunity to enjoy favorable corporate income taxes, said Lu
Jinyong, a researcher at the University of International Business
and Economics.
From next year, income tax rates for domestic and foreign
companies will be unified at 25 percent. Domestic companies
currently pay 33 percent income tax while foreign companies, which
have tax waivers and incentives, pay an average of 15 percent.
Foreign enterprises registered before the rate unification will
be taxed at the favorable rates for another five years.
The figures released by the ministry do not include investments
in the financial sector, such as banking, insurance and securities.
The ministry also did not give the amount for contracted FDI
agreements yet to be fulfilled, as opposed to the ones
realized.
Lu expects FDI in China's non-financial sectors to exceed US$70
billion this year, compared with US$63 billion last year.
"The total FDI to China is likely to hit US$80 billion, a new
record, this year but the figure may decline slightly next year
when the corporate tax unification takes effect," he said.
The Ministry of Commerce noted investments from the United
States increased over 5 percent in the first seven months while
that from the European Union decreased by over 34 percent.
In July alone, the government approved 2,993 foreign
enterprises; actual FDI stood at US$5.04 billion, an increase of
17.84 percent from a year ago.
Past months have seen robust growth in foreign investment in
several sectors.
(China Daily August 14, 2007)
