Locals invest US$66.8bn in China last year

Local had funneled an estimated US$66.8 billion into China for various investment projects as of the end of 2002, Central Bank of China (CBC) Governor Perng Fai-nan (彭淮南) said yesterday.

"The figure was based on tallies on investments made by Taiwan business people via third countries or areas and those approved by the Ministry of Economic Affairs," said Perng at a seminar covering issues related to n China investment and financial services .

Since the 1997-98 Asian financial crisis, Perng said, China has demonstrated a strong magnetic effect in attracting foreign investment with its cheap labor and high administrative efficiency.

Quoting compiled by the International Monetary Fund, Perng said direct foreign investment in China amounted to US$334.7 billion between 1990 and 2001, far exceeding its foreign exchange reserves of US$286.4 billion at the end of last year.

The substantially increased flow of foreign capital into the vast market across the Taiwan Strait has resulted in a serious decline in foreign investment in other Asian countries, including Taiwan, Perng said.

At the end of 2002, Perng said the country registered a trade surplus of US$31.12 billion with China and Hong Kong area.