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Building on success with foreign investment

Updated: 2011-12-27 08:22

By Hu Meidong and Tan Zongyang
Article from China Daily

Dell Inc was one of the first big foreign companies to come to Xiamen. Liang Wei / for China Daily

Global engineering firm ABB Group was also one of the first big foreign companies to arrive in Xiamen. Liang Wei / for China Daily

Xiamen, among the first four special economic zones in China, will continue to attract investment from overseas as it creates an even better environment for foreign companies to begin new businesses, said a municipal government official.

"Foreign investment has been important in Xiamen's change from a fishing village 30 years ago to a industrialized coastal metropolis," said Wang Dexian, head of the Xiamen Investment Promotion Bureau. "Xiamen will live up to its legacy as one of the hottest destinations for investment."

Statistics from the end of November show the city has approved a total of 9,337 foreign-funded projects with a contracted value of $35.8 billion, $24 billion of which has already been invested.

Xiamen is home to operations by 50 Fortune 500 enterprises and has attracted businesses from 11 countries and regions.

"In the early years of reform, foreign investment was in small amounts and came from limited sources. Now the scale of foreign investment has greatly increased," Wang said.

He added that in 2000, when foreign investors were allowed to be individual proprietors, it become a common practice for them to set up wholly owned foreign enterprises. The number of cross-boarder acquisitions is also rising, providing another channel of foreign investment flowing into the city.

Wang added that Xiamen's increase in foreign direct investment (FDI) is also due to creation of a more friendly environment for foreign investors.

Prospering along with the local economy, foreign-invested companies have maintained strong growth, becoming profitable and giving investors the confidence to expand production. Additional investment from existing companies surpassed 45 percent of the total of contracted foreign capital in recent years, Wang said.

Top trade fair

Xiamen has also hosted fairs and exhibitions as well as economic events to attract foreign investors. The annual China International Fair for Investment and Trade (CIFIT) is one of the most famed.

The CIFIT, sponsored by the Ministry of Commerce, is currently China' largest economic trade show for foreign investment and bilateral business opportunities. The event has been held annually from Sept 8 to 11 since 1997 in the coastal city.

CIFIT started out as the Fujian Fair for International Investment & Trade held once a year between 1987 and 1996. It was expanded to a national-level investment and trade fair in 1997.

The 15th CIFIT this year attracted more participants than ever. A total of 3,200 booths from exhibitors from more than 60 countries and regions attracted more than 50,000 visitors to negotiate business opportunities. The five-day event helped sign more than 400 domestic and international investment deals with a total value of $21.45 billion.

In addition to CIFIT, Xiamen also holds the China Xiamen Machinery and Electronics Exhibition and the Cross-Straits Book Fair, which is regarded as an important bridge for Taiwan investors in the mainland market.

Finding opportunities

Xiamen has attracted 50 of the multinational enterprises listed by Fortune magazine as the top 500 global companies, according to the Xiamen Investment Promotion Agency. By the end of October, the multinational giants had 92 FDI projects in Xiamen valued at $4.25 billion. Their contracted capital reached $2.15 billion.

Thirty-two of the Fortune 500 enterprises have invested a combined $2.84 billion in manufacturing. The rest have invested in agriculture, retailing, logistics, real estate and finance.

ABB Group, a global engineering company, was one of the first big foreign companies to arrive in Xiamen. In 1991, the local government adopted preferential measures to simplify examination and approval procedures for the company to build factories in Xiamen.

Today, world-leading companies find Xiamen alluring due to its geographic position, professional logistics and favorable investment policies.

The list includes big US companies such as Kodak, Coca-Cola, GE and Citibank, Europe's ABB, Linde, Philips and Metro, and NEC, Matsushita, TDK, Toshiba and Toyota from Japan.

"Fortune 500 companies not only bring capital and technologies to Xiamen, but also improve the city's ability to better serve foreign-funded enterprises," said Hong Benzhu, deputy director of Xiamen Foreign Investment Bureau.

Hong said the city will continue to build infrastructure and explore more preferential policies for foreign investors.

Article from China Daily
(China Daily 12/27/2011 page12)

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