Sources of overseas investment in Xinjiang Uygur Autonomous Region, northwest China are diversifying with Hong Kong and Taiwan still playing critical role. With the investment environment in the region continuously improving and efforts to attract foreign investment gradually intensified, the range of geographical distribution of investors has become larger and larger. Sources of foreign investment have been widened.
In the 1980s, investors from Hong Kong and Taiwan served as dominant source of funding. Now, main investors include Hong Kong, Taiwan, Japan, USA, Australia, Singapore and Kazakhstan. A pattern of diversified investment has been established. With the settlement of Fortune 500 companies like Volkswagen of Germany, Carrefour, Sekisui Chemical of Japan, Veolia of France, Carlsberg of Denmark as well as Coca Cola, the ability of attracting and utilizing foreign capital has greatly enhanced in Xinjiang.
With further implementation of “Western China Opening up” policy, the environment for foreign investment has been further improved. Xinjiang has been making more efforts to attract foreign capital. Economic cooperation and exchange between Xinjiang and foreign countries been further deepened. Making full use of foreign investment, Xinjiang has increased the investment on technology intensive industry and gradually transformed from low productivity, low tech, labor intensive industry to high productivity, high tech, capital and technology intensive industry. The effectiveness of utilizing foreign investment has been improving and the average investment volume has been increasing every year. Investment volume increased from US$1.67 million in the 1980s to US$10.7 million by far and set a new record high.
Investment field is gradually broadened and industry structure modestly improved. In the early days of reform and opening up, foreign investment was only limited to manufacturing and service industry. After 30 years of development, foreign investment has covered the field of agriculture, manufacture, construction, transportation, telecommunication, wholesale and retail, real estate, public utilities, residential services and other industries. With the adjustment of world industry structure, the world’s manufacturing center is shifting to China. Located in the key location, taking the advantage of the “China western opening up” policy and with the soft and hard investment environment improving, Xinjiang has attracted a number of foreign manufacturing industries to settle in the region. Manufacturing is by far the largest investment industry for the use of foreign capital in Xinjiang. It is also the earliest industry with highest level of opening up to the outside world. Along with the further implementation of the transformation strategy of advantageous resource in Xinjiang, field of foreign investment has been widened from manufacturing to agriculture, mining, infrastructure construction, petroleum and petrochemical industry. Investment structure tends to be optimized.
Starting from scratch, utilization of foreign direct investment in Xinjiang has been improving and becoming more and more comprehensive and systematic. From 1980 when the region’s first joint venture company, the Xinjiang Tianshan Wool Textile Co., Ltd, was founded, till the end of 2014, there had been altogether 2,035 joint venture investment projects approved in Xinjiang. Total contract value accounted for US$6.3 billion. Actual utilization of FDI amounted to US$3.09 billion, among which, 80% of the investment was actualized after 2006. Over last 35 years, annual increase rate of actual utilization of FDI was averaged at 25%. By the end of 2014, there had been 508 foreign invested enterprises in Xinjiang, which included 6 listed companies. To some extent, utilization of foreign capital has supplemented the lack of funding for the economic development in Xinjiang.
According to the data from 2014 Joint Annual Report of Foreign-funded Enterprises, 380 enterprises participated in the joint reporting, showing a participation rate of 75%. These enterprises reported a combined investment volume of US$7.145 billion, registered capital of US$3.664 billion, paid-in foreign capital of US$2.444 billion. They realized sales revenue of 33.165 billion yuan, paid tax totaling 2.171 billion yuan, created profits of 2.541 billion yuan and provided 36,033 job opportunities including 286 for foreign employees. （by Li Xiaoling）
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