Foreign firms invested $52.7 billion in China in 2002 and may pour in even more this year due to cheap labour and an economy that has defied a global slowdown, economists said today.
Actual foreign direct investment (FDI) rose an annual 12.5 per cent in 2002 as foreign companies flocked to Asia's second-largest economy, drawn by lower costs for making goods for export and hopes that China will open its potentially vast market wider.
The growth was slightly slower than the 14.9 per cent annual rise in 2001 to $46.8 billion. The slowing trend may continue this year, economists say, but not enough to ease concerns among Asian neighbours that China is the magnet for FDI in the region.
China's booming car market attracted its share of investment, with foreign automakers including General Motors and Hyundai among the firms going there.
The United Nations reported last year China was close to edging out the United States - where investment has dropped dramatically in a weak economy - for the first time as the world's largest FDI recipient.
But some analysts said the FDI figures may be a bit overstated. The two biggest sources of foreign investment in 2001 were Hong Kong and the Virgin Islands.
Analysts say some Chinese firms have shifted money secretly to Hong Kong and other countries and then re-invested it in China in a bid to enjoy tax breaks for foreign investors.