Investing in China Foreign Direct Investment FDI. Costs and procedures.

Summary:

During the Tenth Five Year Plan period, China’s opening-up was fully embraced by international economic cooperation and competition since its WTO (World Trade Organization) entry. China also made progress in utilizing foreign investment.

Foreign investment of $383 billion was actually used, far exceeding the total value during the Ninth Five Year Plan, including about $286 billion as foreign direct investment (FDI), $38 billion collected by issuing stocks overseas, about $46 billion as loans.

Foreign investment scale is enlarging with more investment modes. FDI grew by more than 34% in the Tenth Five Year over the Ninth. China has become a favorable investment destiny for foreign capital and multinationals. Other foreign investments represented by overseas stock issue also made much progress. By the end of 2005, 122 mainland enterprises had been listed on the stock market of Hong Kong and other foreign security exchanges, raising a fund of $55544 million (excluding China-affiliated corporations). A total of 34 overseas institutions were recognized as QFII.

China successfully took over the new-round international manufacturing industry. During the Tenth Five Year Plan period, China seized the opportunity of manufacturing restructuring and global shrift and attracted a great deal of FDI, preliminarily making China an important production base in the world.

Capital and technology intensive industries attracted much more foreign investment; a number of large foreign investment projects were launched during the Tenth Five Year after years of preparation.

With the entirely implementation of China's WTO commitments, apparent progress has been made in the service industry in the opening up. By the end of 2005, a total of 71 foreign banks from 20 countries and regions have set up 238 business operative institutions in China. More than 10 Chinese-invested commercial banks including China Construction Bank, Bank of China and Industrial and Commercial Bank of China have brought in overseas strategic investments, and China Construction Bank and Bank of Communications were successfully listed overseas.

On the basis of the WTO commitments, the insurance industry has been opened to foreign-invested insurance companies in all regions and in all businesses except related statutory insurances. By the end of 2005, the number of foreign-invested insurance companies had increased to 40 companies and 93 head companies and branches.

Foreign-invested enterprises have become an important part in the fields of logistics and commerce. In 2005, the foreign capital utilized in the service industry of China exceeded one fifth of the total amount of foreign investments in the year.

As to the foreign capital utilization, there were 44001 contractual foreign direct investment projects in all industry, the amount of contractual foreign capital utilization was 189 billion dollars, the amount of foreign capital actually utilization was 60.3 billion dollars.

The Chinese government has divided its industrial projects for investment into four categories classified as encouraged, permitted, restricted and prohibited.

Secondly, the scale of the investment amount is also worth noting:

• For large investment projects of USD 30million or above, the approval authority rests on central government (State Council ministries);
• For projects under USD30million, in the unrestricted category or quota free, or license free, the approval authority goes to local government departments.

Wal-Mart came to China in 1996. The first Supercenter and SAM'S CLUB were opened in Shenzhen, Guangdong Province. Today, there are 101 units in 53 cities, including 96 Supercenters, 3 SAM’S CLUBs and 2 Neighborhood Markets. Across China Wal-Mart employs over 40,000 associates. Wal-Mart firmly believes in local procurement. They recognize that by purchasing quality products, they can generate more job opportunities, support local manufacturing and boost economic development. Over 95% of the merchandise in the stores in China is sourced locally.

They have established partnerships with nearly 20,000 suppliers in China. At Wal-Mart. In August 2007, Wal-Mart once again secured the top spot of the 2007 Supplier Satisfaction Survey conducted by Business Information of Shanghai. Additionally, Wal-Mart directly exports about US$9 billion from China every year. The export volume by third party suppliers is also estimated to be over US$9 billion.

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Investing, China, Foreign, Direct, Investment, FDI, Investment costs, Sectors, Project, Set-up, procedures, Investment Environment, Master, International Business