Foreign Investment Focused Service Industry In China

With the rise of the Chinese economy, China has become one of the fastest growing economies in the global

. According to World Bank statistics, Chinas GDP proportion in the global economy has increased from 4.1% in 2001 to 10.4 percent in 2011; the further development of Chinas manufacturing industry, and overtook the United States as the worlds manufacturing value-added countries in 2010.

The rapid growth of foreign investment

A large number of foreign investors want to invest in China because of powerful economic influence, a huge consumer market, low labor resources, and increasingly sophisticated market economy and legal system, the gradual relaxation of foreign trade business and the substantial decrease in tariff. According to statistics, the national and regional investments are more than 190 in China and foreign-invested enterprises reached 347,000, more than 480 Fortune 500 companies conducted business in China. Chinese American Chamber of Commerce recently announced that more than 80 percent of U.S. companies optimistic about business prospects in China and 73 percent of companies plan to expand investment in China.

Services become to hot spot for foreign investment

There are many forms of foreign trade in China, including direct orders from the outside, the establishment of representative offices, the establishment of the trading company of domestic capital, establishment of trading companies with foreign investment, increase the operating range of the original foreign-funded enterprises. In recent years, with Chinas industrial structure was further optimized, the foreign trade activities in China has also undergone changes, service trade has become a new hotspot of foreign investment. A notable feature of service sector growth in foreign investment is the rapid growth of the number of services utilization of foreign capital. According to the foreign investment (FDI) data of the Commerce Department, in January-November 2011, services the actual use of foreign capital amount of $ 48.768 billion, an increase of 18.54%, the use of foreign capital of Chinas service industry accounted for the overall proportion more than manufacturing for the first time.

The full liberalization of Chinas service industry as well as good prospects for economic growth and huge service demand market are the important reasons for the hot of foreign investment in the service industry. At present, the field of foreign investment in Chinas service industry, has expanded from the first tourist hotel industry, to the foreign offices, tourist facilities, attractions, intermediary consulting, business, health care, education and other fields.

However, the current overall level of Chinas service industry is still relatively backward, the proportion of GDP is less than 40 percent, compared with up to 80% of GDP in developed Western countries, there is much more development space of Chinas service industry. As an important force in Chinas economic growth, the favor of foreign investment to China service industry is expected to become a pushing hand for the rapid development of Chinas service industry, and to achieve win-win situation for the foreign-funded enterprises and Chinese services market.

by: ken xu

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