Introduction to Foreign Investment in the Machinery Industry

China's machinery industry is one of the industries where foreign investment has been most actively invovled.

Foreign investment started to flow to China's machinery industry in 1981. The machinery industry experienced a stage of great development in terms of foreign direct investment from 1990 to 2000, during which the number of projects of foreign direct investment reached 15,310 and the contractual value of foreign investment reaches US$20.720 billion, increasing 133 and 122 times respectively over the record set five years ago.

The main sources of foreign investment at present are from developed countries, including Japan, Germany, France, the United States, Australia and newly industrialized countries, like Korea and Singapore.

Ten years ago, overseas investmentmainly came from regions including Macao, Hongkong and Taiwan.

Now all the world top 500 trans-corporations whose mechanical products predominate the markethave invested in China. The sales revenue for foreign invested machinery enterprises amounts to 30% of the total sales revenue of machinery industry and their export value amounts to over 50 percent of the total export value of the machinery industry.

Up to the end of 1999, the number of projects of foreign direct investment amounted to 21,215 and the contractual value of foreign investment amounted to US$34.519 billion , accounting for 6.2 percent and 5.7 percent respectively.

According to official statistics, in 2001 the number of foreign invested projects in the machinery industry reached 2,473 and the contractual value of foreign investment reaches US$5.68 billion.