Foreign investment in China up for ninth straight month

Foreign direct investment in China climbed for a straight ninth month in April with Beijing further relaxing rules for potential investors. The move by the world's fastest-growing major economy to attract foreign investors comes even as it tries to sustain rapid economic expansion.

China has reported growth of 11.9 per cent in the first quarter.

The communist regime in Beijing last month announced several measures, including preferential policies for land use and tax breaks, in a bid to attract foreign investment into what it dubs ''encouraged categories'', such as renewable energy, high-technology and service industries in central and western China.

Beijing has also allowed local authorities to approve foreign investment projects upto $300 million in value, setting aside the previous cap of $100 million.

Market analysts expect China to reap a rich harvest in FDI as investor confidence in the country grows with the knowledge that the nation is poised to overtake Japan as the world's second- largest economy this year. It has already replaced the US as the world's largest auto market in 2009.

More importantly, government data indicates an 18.5 per cent growth in retail sales last month, as compared to the same period a year earlier.

Interestingly, government data points out that foreign-invested companies accounted for 28 per cent of the nation's industrial output and generated 56 per cent of the country's exports in 2009. They also directly employ a huge 45 million people.