China absorbs foreign
capital through foreign loans, direct foreign investment and other
investment by foreign business people (international leasing, compensation
trade, processing and assembling). So far, foreign business people
from more than 170 countries and regions have made investments in
China. Since the founding of the first Sino-foreign joint venture
in 1980, China has taken the utilizing of foreign capital as an
important aspect of basic state policy, and great efforts have been
made to promote it. In the beginning Sino-foreign joint ventures
first entered the processing industry, and later they expanded toward
the basic industries and export-oriented enterprises, commerce,
finance, information, consultation, real estate, and other fields.
assembly line of
the Xiaxing Motorcycle
Co. Ltd. at the Xinglin Taiwan business investment
zone in Xiamen City.
Though most Sino-foreign
enterprises are located in the coastal cities, some of them have
gradually settled down in the inland cities. In recent years, thanks
to the constant improvement of China’s investment environment, some
international consortiums and transnational companies have come
to China, one after another. Of the 500 top transnational companies
in the world, more than 300 have invested in China. Foreign investments
have become an important capital source for China’s economic construction.
In 1999, direct foreign investments in real terms totaled 40.3 billion
US dollars; and projects with direct foreign investment numbered
16,918. Between 1979 and 1999, of foreign capital utilized by China,
the accumulative total of direct foreign investment came to 305.9
billion US dollars. By 1999, China had approved the founding of
342,000 foreign-funded enterprises, of which over 100,000 have gone
into operation. Most of them have made satisfactory profits.