December 7, 2000	atimes.com

China China a magnet for multinationals BEIJING - Nearly 400 out of the top 500 companies in the world have invested in China - a huge market and also an ideal place for their export bases in the Asia-Pacific region, say companies. This will change the economic development pattern in China and even in the region as a whole, according to experts. After 10 years of development, Pudong in Shanghai has become an area to receive investment from multinationals. They have invested in automation equipment, chemicals, building materials, telecom equipment, computers, automobiles, household electrical appliances and medicines in the area, making it an industrial highland in China and in Asia. Intel has constructed the Intel Science and Technology (China) Co Ltd in the Waigaoqiao Bonded Zone in Pudong and the company is exporting 90 percent of its products. A number of multinationals have netted Pudong into their global sales networks and are busy constructing the area into their production and sales bases. Motorola has announced that it will invest an additional US$1.9 billion to construct the world's largest semiconductor production center in Tianjin. Statistics provided by the General Administration of Customs show that China's foreign trade export was $182.3 billion in the first nine months of this year, of which export of foreign-invested firms was 85.7 billion yuan, accounting for 47 percent of the total. The proportion is seven percentage points higher than the 40.7 percent in 1996. Guangdong, Shanghai, Jiangsu, Zhejiang, Shandong and Shenzhen all reported an export volume of more than $8 billion. Statistics also show that export by the companies solely launched by multinationals is obviously higher than export by other types of foreign capital firms. In 1999, export by Sino-foreign contractual joint ventures dropped 6.7 percent; that by Sino-foreign equity joint ventures increased by 4.4 percent; and that by solely foreign-funded firms increased by 18.3 percent. Motorola ranked fifth in export among all enterprises in China. As all these have been taking place, profound changes will be taking place in the pattern of economic development in the Asian and Pacific region, experts note. Hong Kong will be home for more headquarters and bases of multinationals and some companies will shift their headquarters to Shanghai and other coastal cities. Some 840 multinationals have opened headquarters and over 1,600 have opened representative offices in Hong Kong. There is a trend that multinationals are shifting their production and export bases from eastern China to western China. Of the top 500 enterprises in the world, more than 60 have invested in China's western areas. Hewlett Packard is constructing a large e-commerce center in western China, as are Mitsubishi, Ericsson and Nokia. While taking China as a production and export base, multinationals are also establishing research and development centers in China, which will constantly upgrade the export products. (Asia Pulse)

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