China still a top destination for foreign companies

: 0 Comment(s)Print E-mail China Daily, September 5, 2012

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A night view of Guangzhou.

Worries unnecessary

Dean attributed China's FDI decline to the global economic situation, saying worries are unnecessary. "The global economy affected Chinese FDI," said Dean.

And "surveys by AmCham China showed US companies are committed to the Chinese market, and big companies are already here in China, so there are not necessarily new FDI numbers," he said.

The US is a major investor in China. During the past seven months, China's FDI from the nation gained by 1 percent to $1.96 billion, while FDI from the EU dropped by 2.7 percent.

To help the economy rebound, some local governments, including Tianjin and Chongqing municipalities, and Changsha in Hunan province, have announced plans to boost industrial investment over the past few months.

China cut interest rates in June for the first time in three years, and again in July. The nation's central bank has also lowered the reserve requirement ratio for lenders three times starting in November to support growth.

"We are encouraged by the actions ... and we expect China will continue to ease policy and increase investment spending to help improve growth. Those actions will likely lead to better growth in the construction industry late in 2012 and into 2013," said Thieneman from Caterpillar.

Despite the preferential policies adopted by many countries worldwide, China remains an attractive market for foreign companies, due to the struggling economy in developed markets and the unfavorable business climate in many developing economies.

Doug Oberhelman, chief executive officer of Caterpillar, said in August that the global economic outlook is more uncertain now than at the start of the financial crisis in late 2008.

"It would take another five years before Europe’s economy begins to see growth again," he said.

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