"It's predicted that for the whole year, we are going to hit US$50 billion (in FDI)," Shi Guangsheng, minister of the Ministry of Foreign Trade and Economic Cooperation (MOFTEC), said yesterday. "Hopefully we will become the world's No 1."

Shi made the forecast while addressing The China Conference: the Year of Capital, a high-profile seminar organized by the Euromoney Conferences, a division of Euromoney Institutional Investor PLC.

The two-day event, co-hosted by the Industrial and Commercial Bank of China and the Hongkong and Shanghai Banking Corporation Limited (HSBC), opened yesterday and drew more than 700 participants from 24 countries and regions.

For the past nine years, China has been the biggest developing country recipient of FDI but has remained behind the United States. A strong performance so far this year is boosting optimism.

"From January to October, we achieved important progress," Shi noted. New foreign-invested businesses registered in the first 10 months soared by 35 per cent year-on-year, to 27,630, bringing an actual investment of US$44.7 billion, up 20 percent from a year earlier.

And with the fresh capital came a more desirable geographic and industrial allocation: "It has been increasingly shifting from general manufacturing to infrastructure and high-tech," Shi said. "And the central and western areas are also witnessing rapid progress."

The minister added that "China has become a priority for foreign investors."

Over the past year, Shi said China, as a World Trade Organization (WTO) member, has fulfilled its commitments to reduce tariffs and scrap other trade barriers, and has either revised or cancelled 2,300 regulations, which means it has "basically" completed its WTO-driven law-mending work.

A WTO-related legal framework, focused on legislation governing Sino-foreign joint ventures, co-operatives and wholly foreign-owned businesses, has been "basically established," Shi said.

But China is facing growing competitive pressure from neighbouring countries, which, in the face of a global slide in FDI last year, are stepping up efforts to woo foreign investors by refurbishing their investment environments and offering favourable policies, other officials said yesterday.

To remain competitive, Shi said China plans to further improve its FDI regulations and make them "more predictable, consistent and workable," and also plans to simplify approval procedures.

Also at the seminar, senior representatives from foreign companies, including HSBC, Siemens Ltd and BP, expressed satisfaction with China's progress in improving its business environment, confidence in China's economic prospects, and a clear intention to further invest.

Noting complaints from his peer investors over slow progress in gaining new market share, HSBC Chairman David Elton urged a long-term perspective in the complex and increasingly competitive China market, citing his bank's own strategy. "Short-term thinking is more and more prevalent," he noted.

Referring to its recent equity purchases into a Chinese bank and an insurance company, Elton said: "In reality, we know the biggest return from these investments won't come for decades."

(China Daily December 5, 2002)