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FDI up 13% in 7 months

By Jiang Wei (China Daily)
Updated: 2007-08-14 09:14

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A group of foreign businesspeople at the China International Fair for
Investment and Trade in Xiamen, East China's Fujian Province. [File Photo]

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 $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.

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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 $70 billion
this year, compared with $63 billion last year.

(For more biz stories, please visit Industry Updates)

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