Ma Xiuhong, vice-minister of commerce, delivers a speech yesterday during a press conference for the International Investment Forum 2003, as part of the ongoing CIFIT.


Foreign direct investment (FDI) in China reached a record high last year, pushing the country to the top of the world rankings in terms of attracting FDI, according to the China Foreign Investment Report 2003.
The report, analyzing China¡¯s utilization of foreign investment in 2002, was released by the Ministry of Commerce yesterday during the Seventh China International Fair for Investment and Trade.
The country¡¯s actual foreign investment in 2002 exceeded US$52.7 billion, a year-on-year
increase of 12.51 per cent, despite a decline in global FDI flows, the report said.
The structure of foreign investment has been further optimized and foreign-funded enterprises
are operating robustly, it shows.
The 220,000-odd foreign-investment enterprises achieved an added-value of 809.1 billion
yuan (US$97.7 billion) last year, increasing 13.3 per cent compared with 2001.
However, the regional investment was still unbalanced. Foreign investors have focused
on China¡¯s eastern regions. The report, the first official paper to focus on FDI, is expected
to provide a platform for better understanding and further co-operation between China and the rest of the world, said Ma Xiuhong, vice-minister of commerce.
At the same time yesterday, the United Nations Conference on Trade and Development released its World Development Report 2003. It predicted that the global FDI flows this year are set to stabilize around the depressed level seen in 2002, but a rebound is likely next year.
It says prospects for FDI flows vary widely for industries ¡ª with the immediate future
brighter for consumer pharmaceuticals, electronics and semiconductors, but dimmer for
automobiles, metals and machinery and aerospace.
Global FDI inflows, down by over 40 per cent in 2001, fell by another 21 per cent last
year to US$651 billion. The dramatic fall in the value of cross-border mergers and acquisitions, from US$1.2 trillion in 2000 to US$370 billion last year, was one of the main reasons for the FDI decline.

Express staff

Well-known as the ¡°hometown of coal and iron resources,¡±
North China¡¯s Shanxi Province will do more to lure a greater amount of overseas investment, which it seriously lacks when compared with many other regions in the country, a high-ranking official vowed yesterday.
Shanxi attracted a total foreign investment of US$600 million last year, an increase of 1.9 per cent over 2001 ¡ª which is still quite small compared with other regions, especially
coastal areas.
However, Shanxi has great potential and golden business opportunities for overseas entrepreneurs to develop, Song
Beishan, vice-governor of Shanxi, said during a forum for
governors and ministers who are attending the ongoing fair
for investment and trade.
For example, there are lots of investment opportunities in
the coal and exploration sectors, and for reducing pollution
linked to the coal industry, in addition to improving the quality of various coal-related chemical industries.
In the 25 years since China adopted its major reform policies, Shanxi has made huge strides to improve its investment environment including adjusting the structure of its industries, strengthening its environmental protection and providing various favourable policies to offshore investors.
Presently, Shanxi is sparing no effort to reform its traditional
industries, such as coal, and is working hard to become China¡¯s clean energy resources base, coal-chemical industry
base and iron-and-steel smelting industry base.
During that process, foreign investment, advanced technology
and experience are all vital, said Song.
Meanwhile, Shanxi is also serious about expanding other
fields such as tourism and culture, the modern services industry and the high-tech industry.
Shanxi is popular with tourists at present due to its historical, cultural and natural sites, among which Pingyao
Ancient City and the Datong Yungang Grottoes have been
listed as World Cultural Heritage locations.
Wutaishan Mountain, which is well-known as a Buddhist
holy site, attracts millions of tourists every year.
Last year, the province had 248,000 visits of overseas people and regions, 25.4 percent higher than in 2001.


Moon cake always seems to make the news.
Every year, in late August and early September, this sweet, often oily, pastry will bring some surprise ¡ª not necessarily a pleasant one ¡ª to the Chinese people who eat it to celebrate the Mid-autumn Festival.
Several years ago, there was a report that a box of moon cakes sold for 10,000 yuan (US$1,200). The news surprised most, but people later learned it was only a sales promotion stunt. In the following years, people became used to the ¡°heavenly high prices¡± of moon cakes.
One piece of moon-cake-related news reported in 2001, however, is still fresh in people¡¯s memories. The media revealed that a Nanjing-based moon cake plant had used fillings left over from the previous year.
The company¡¯s manager made matters worse when he told media outlets ¡ª while being questioned directly ¡ª the practice was a common secret in the trade.
The revelation triggered an uproar across China. Sales of the seasonal treat plummeted dramatically that year. Last year, reports of what moon cake makers were doing to assure consumers their products were safe and of the best quality dominated the news.
Every company, it seemed, had its own publicity stunt. Many plants invited buyers to visit their production lines to ¡°see with their own eyes¡± how safe and clean the production was while the flour, bean paste, sugar and fillings became the round, brownish and sweet-smelling cakes. Media jeered the phenomenon
as ¡°a new tourism attraction.¡± But there were no reports about whether people actually visited the plants before making up their minds to enter stores to buy the cakes.
The cakes made the news again this year. This time, however, media reports have focused on the high-tech method being adopted by authorities to ensure the quality of the cakes. Beijing Youth Daily reported last week that an electronic magnifying scanner ¡ª able to magnify its subject 100,000 times ¡ª was being used to examine fillings.
The scanner compares the shapes of the tiny grains in the cakes¡¯ flour with those in a standard picture to determine if they are ¡°100 per cent pure.¡±
The inspection authorities were certainly faithful to their duty. However, one cannot help but give a wry smile when hearing that news.
Cake is just a cake case. Break it in two and you can see what¡¯s inside, right? Normally. But nowadays, quality has become so complicated a problem that high technology must be used to identify a pastry.
That could not be helped, because the technologies used to make the fake products were also cutting edge. For example, the flour made from ordinary beans, plus certain flavouring and pigments, was used to simulate the much more expensive lotus seeds in ¡°lotus cakes.¡± You can¡¯t help but admire the makers for
their skills.
It is poignant to see, and note, the escalation in the race to develop technology to crack down on fakes, and the technology used to make the fake products.
A similar situation is occurring on the other side of the ocean. The New York Times reported late last month that a new technology, known as biometrics,
had been adopted in the United States to examine inbound travellers at border entry points.
Scanners and facial recognition cameras will be used to match a traveller with the digital measurements of his/her fingerprints, face, retinas or other haracteristics stored on a computer chip imbued in his/ her passport. One cannot help marvelling at the advancement of technology.
One also cannot help wondering if our daily activities, ranging from buying a cake to travelling to another place, will become increasingly complicated. Terrorism seems to be one of the top ¡ª if not the most important ¡ª security concerns of the United States. What is China¡¯s top security concern? This is not to be answered by ordinary people, such as the staff of this newspaper. At least, food safety deserves great attention. The use of electronic scanners
certainly reflects the authorities¡¯ concerns for people¡¯s health. But the final solution to the problem must be the elimination of rampant cheating in the market.
Such a task involving ethical improvements will be more difficult. It will require greater effort from all of society ¡ª not just the government.
The author is editor-in-chief of China Business Weekly