Fujian was one of initial Chinese provinces opening to the outside world; therefore, foreign investment attraction is introduced earlier. So far, the province has investment from over 100 countries and regions, including the investment from 98 world-famous multinationals. Focusing on the task of building the Taiwan Strait West Coast Economic Zone, Fujjan has in recent years paid its efforts more on enhancing the quality of investment promotion and the level and efficiency of foreign investment attraction. As a result, fresh progress has been made in attracting foreign investment.
        1．Expanding Scale of Foreign Investment and Significant Improvement of Investment Quality
        Since the reform and opening up, the scale of foreign investment in Fujian has been expanding rapidly. By the end of 2007, the province had approved 41,663 foreign-invested enterprises and had a actually utilized foreign investment of USD 74.0 billion, accounting for 10％ of the national total. In 2007 alone, Fujian approved 1,723 projects involving foreign direct investment, down by 20.31％ over the previous year. The actually utilized FDI in the year totaled USD 8.131 billion, up by l3.2％.
        Due to years of efforts, Fujian has made tangible achievements in attracting investment from multinational companies. Statistics indicated that 98 world-famous multinational companies had established l52 projects in Fujian, among which the world top 500 multinationals include Walmart, General Electric, British Petroleum, Exxon, Toyota Motors, Mitsubishi Company, Maersk, Itochu Corporation, Deutsche Post, Siemens, Sumitomo Corporation, Marubeni Corporation, Boeing, Panasonic, Morgan, HSBC, HP, METRO, Toshiba, NEC, Fujitsu, Dell, Philips, Nokia, Pepsi, Alcatel, Emerson Electric, Mcdonalds, Kodak, ABB, Daimler Chrysler Danone Group, Fedex, Cisco systems Inc., Fuji xerox and Cendant.
        The expansion of foreign investment in Fujian is also manifested in the growing number of large foreign—invested projects. Large projects involving an investment of over USD l0 million each have played tangible mainstay roles of the growth of foreign investment in Fujian. In 2007, Fujian approved 404 large projects, each of which involved the FDI(including capital increase) of over USD 10 million, which with a total investment of USD 19.831 billion and were 64.6% higher than in the previous year. The conractual value of foreign investment reached USD 7,189 billion, which was 72% higher than that in the previous year and accounted for 76.1% of the province's total. The growth was 11.4% higher than in 2006. Driven by large projects, the average scale of the contractual value of foreign—invested projects rose from USD 3.6212 million in 2006 to USD 5.4842 million.
        Beside expanding the scale of absorbing foreign investment, Fujian also place equal emphasis on both quality and efficiency, actively guide the foreign investment into the industry, optimize foreign investment structure and improve the quality and the level of foreign investment, thus achieving a remarkable result. The rapid growth of foreign investment maintains sound momentum, and the quality and the level of foreign investment increase significantly.
2．Forms of Foreign Investment
        Chinese-foreign joint venture, Chinese-foreign cooperative enterprises and wholly foreign-owned enterprises are main forms of foreign investment．An analysis of the data over years indicates that the proportion of foreign investment actually utilized by joint ventures and cooperative enterprises in the total utilized foreign investment has visibly declined and that of the wholly foreign-owned enterprises has markedly risen and gradually taken the leading position. According to the data provided by Fujian Provincial Department of Foreign Trade and Economic Cooperation and based on the capital verification standards, the amounts of actually utilized foreign investment by three types of enterprises were USD 687 million, USD 47 million and USD 3.32 billion respectively, and their proportions were 16.92%, 1.16% and 81.77% respectively.
        In recent years, capital increase, acquisitions and other types of investments are expanded further, in addition to foreign-invested enterprises being newly established. Especially, the capital increase and holding of foreign investments have shown a new trend of development since this year. Firstly, the foreign-invested enterprises listed overseas significantly increase the capital by fundraising; secondly, these foreign-invested enterprises reorganize the assets and expand the capital by preparing and applying to be listed. In 2007, foreign-invested enterprises in Fujian Province increase capital of USD 3.399 billion, up by 57.6%; there are 79 enterprises being merged and acquired, with total investment of USD 731 million, up by 5.9%; the contractual value of foreign investment reached USD 247 million, up by 26.8%.
3．Industrial Distribution of Foreign Investment
        The ratio of foreign investment among the primary, secondary and tertiary industries changed from 4.2:74.2:21.6 in 2000 to 2.9:73.9:23.2 in 2007. In 2007, the secondary industry continued to be the favorate sector for foreign investment. Three pillar industries, namely chemicals, electronics and machinery saw further expanding in terms of scales of foreign investment. In the year, the contractual value of foreign investment in the secondary industry totalled USD 6.165 billion, which was 31.6% higher than in the previous year and accounted for 73.9% of the provincial total. Specifically, the contractual value of foreign investment in three leading industries, namely eletronics, machinery and petrochemicals, totalled USD 5.153 billion, up by 27.7%, increasing from 37.3% in 2006 to 41.8% in 2007 in term of provincial total.
        According to the captial verification standards, the amounts of actually utilized foreign investment by the three leading industries in Fujian for the first half year of 2008 reached USD 1.510 billion, up by 80.4% compared to the same period last year, accounted for 40.8% of the provincial total, an increase of 6.4 percentage points compared to the same period last year. Specifically, the amounts of actually utilized foreign investment by petrochemical industry reached USD 640 million, an increase of 1.2 times; the amounts of actually utilized foreign investment by electronic & information industry and manufacturing of machines and equipments are respectively USD 361 million and USD 509 million, an increase of 83.2% and 47.3%.
        Meanwhile, service industry has become an increasingly important sector for foreign investment in Fujian, with further development in terms of attracting foreign investment. In 2007, under the cooperation of managments in various industries, Fujian province encouraged joint investment invitation activities with emphasize on industry development, and it further adjust the industry strcture of foreign investment attraction. The service industry, especially, has demonstrated a strong momentum in attracting foreign investment. The contractual value of foreign investment in service industry for the whole province in 2007 reached USD 2.312 billion, up by 54.9%. Specially, the scale of the real estate industry in terms of contractual value of foreign investment rates the top of all the service industry, reaching USD 914 million, an increase of 1.1 times; it was USD 308 million for the leasing and business service sectors, an increase of 29.3%; the amount of foreign investment absorption for the resident service sectors reached USD 280 million, an increase of 5.1 times; it was USD 279 million for the wholesale and retail sectors, an increase of 59.4%; for the transport storage and postal service sectors, it reached USD 246 million, an increase of 75.3%.
4.Regional Distribution of Foreign Investment
        Coastal areas attract most of the foreign investment of the province. In particular, three cities of Fuzhou, Xiamen and Quanzhou account for more than 75% of the total foreign investment attracted in the province.
        Especially since this year, Xiamen and Quanzhou have played the leading role in the whole province in terms of foreign capital absorption, under the promotion of large projects. In 2007, in terms of contractual value of foreign investment, Xiamen and Quanzhou reached USD 6.179 billion, up by 41.8%, which was 65.4% of the provincial total, an added value of USD 1.821 billion, contributing 112.4% of the provincial total; in terms of actual paid-in value, Xiamen and Quanzhou reached USD 2.357 billion, accounted for 58% of the provincial total, up by 25.7%, accounted for the added value of 57.4% of the provincial total, increasing 15 percentage points of the whole province. Moreover, cities with both increase in the actual paid-in value and contractual value of foreign investment include Shanming, Zhangzhou, Nanping and Longyan; the contractual value of foreign investment for Fuzhou, Putian and Ningde decreased by 7.4%, 59.4% and 79.3% respetively.
        According to the capital verification standards, Xiamen’s contractual and paid-in foreign investment were USD 3.256 billion and USD 1.271 billion, which were respectively 40.87% and 33.2% higher than in the previous year, ranking first in the province in terms of scale. The city’s pulling role became even stronger. The city of Quanzhou ranked the second in the province in terms of foreign investment utilization. Its contractual and paid-in foreign investments reached USD 2.927 billion and USD 1.085 billion respectively, up by 42.79% and 17.92%; Fuzhou was in the third place with the contractual and paid-in foreign investments reached USD 1.324 billion and USD 700 million, which were respectively -7.41% and 5.97% higher. Other cities with districts in their jurisdiction whose contractual and paid-in foreign investments were respectively: Zhanzhou reached USD 940 million and USD 450 million, with growth rates of 7.25% and 12.4%; Longyan reached USD 261 million and USD 120 million, with growth rates of 23.32% and 56.41%; Putian reached USD 140 million and USD 120 million, with growth rates of -59.44% and 27.3%; Shanming reached USD 189 million and USD 54 million, with growth rates of 10.51% and 4.9%; Nanping reached USD 387 miion and USD 48 million, with growth rates of 29.53% and 18.38%; Ningde reached USD 28 million and 22 million, with growth rates of -79.31% and 0.14%.
5．Sources of Foreign Investment
        So far, foreign companies from over 100 countries and regions have invested in Fujian, including l52 projects invested by 98 world famous multinational companies. But main sources of foreign investment are Hong Kong, Virgin Islands, Taiwan, Macao and European Union. The pattern with Hong Kong, Macao and Taiwan as the main funding source becomes more stable. Eventhough Fujian continuously explore new sources of investment, the advantage of being adjacent regions to Hong Kong, Macao and Taiwan geographically remains the prominent characteristics of Fujian province. Constructing the cooperated and exchange platform between Fujian and these three regions and attracting foreign investment from these regions become the integral supporting factor in the development of foreign investment attraction, still leading the overall scale of foreign investment in Fujian province. In 2007, the total contractual value of foreign investment from Hong Kong, Macao and Taiwan (including that via third places) reached USD 6.454 billion, up by 21.8%, accounting for 68.3% of the provincial total, an increase of 0.6 percentage points compared to the same period last year; the amount of actual paid-in value from these three regions totalled USD 2.892 billion, up by 36.8%, increased from 65.7% last year to 71.2% of the provincial total. At the same time, the investment trend by Taiwan investing via a third place enhances further. In 2007, the total contractual value of foreign investment in Fujian (including that via third places) reached USD 2.246 billion, up by 90.6%, acounted for 23.8% from 15% of last year of the provincial total, with total contribution rate to the province’s investment growth of 65.9%; the actual paid-in value of foreign investment from Taiwan reached USD 1.098 billion, up by 45.8%, an increaes of 19.7 percentage points higher than the provincial average growth rate, with total contribution rate to the province’s vestment growth of 41%.
        Based on historically comparable capital verification standards, Fujian's top five investment sources in terms of investment value in 2007 were Hong Kong, Virgin Islands, Taiwan, Macao and European Union. Their contractual investments were USD 4.071 billion, USD 1.211 billion, USD 970 million, USD 177 million and USD 175 million respectively, which together accounted for 81.4% of the total foreign investment in the province. In particular, the growth of the investment from Hong Kong, Taiwan and Macao maintained a rapid growth, with the contractual value of the investment of respectively 17.5%, 23.3% and 49.9% higher than in the previous year. At the same time, the foreign investment from EU and other developed counries remain strong, with actual utilized foreign capital grew 40% higher than in the previous year.
        According to data published in February 2007 by FuJian's Bureau of Statistics, while traditional sources of investment continued to maintain considerable scales in 2006, investment from other sources, such as from Lebanon, Qatar and other countries increased further. Based on the contractual value of foreign investment, Fujian's top five investment sources continued to be Hong Kong, Virgin Islands, Taiwan, Southeast Asia and the United States, figures of which accounted for 50%, l3.8%, 8.7%, 6.9% and 3% respectively. Together, they accounted for 82.4% of the total foreign investment in Fujian. In particular, the investment from Virgin Islands was not only large in scale but also high in growth rate with the contractual and paid-in value being 40.4% and 46.6% higher than in the previous year. Their contribution rates to the province's investment growth were 16.6% and 26.7% respectively. The three new investment sources including Lebanon and Qatar have showed a good beginning despite their small investment scales.
6．Comparison with National Level of Foreign Investment Attraction
        From 1988 to 1993, the scale of foreign investment attracted by Fujian was expanding rapidly at an average annual rate of over 100% except in 1990 when the actually utilized foreign investment dropped slightly. The growth in 1988 was the highest, up by 150.3% over the 1987 level. This growth rate more than quadrupled the national growth rate of 38.03% in that year. In 1991, the proportion of Fujian's actually utilized foreign investment in the national total was the highest at 14.76%. But since 1994, Fujian's growth rate of the actually utilized foreign investment declined dramatically and its share in the national total also lowered. The share had ranged between 8% and 9% for nearly l0 years. In 2005, the share was 8.6%. In 2006, Fujian's actually utilized foreign investment rose 15.3% and its share in the national total rose to 10.34%, which was in sharp contrast with the 4.1% drop in the national total of actually utilized foreign investment.
        In terms of forms of foreign investment, the share of the foreign investment actually utilized by Fujian's wholly foreign-owned enterprises is still higher than the corresponding national average share. In 2007, the share was 81.77% for Fujian and 78% for the nation.
        In terms of the industrial distribution of foreign investment, the share of the foreign investment actually utilized by Fujian's tertiary industry is relatively low. In 2007, the share was 23.2%, 41% lower than the national share.