James X. ZHAN Chief, International Arrangements DITE/UNCTAD Tel: / Fax: January 2004 Using FDI to strengthen competitivenss: the case of China

Contents of the presentation  China’s export competitiveness – a dynamic perspective  FDI and China’s competitiveness  Policies in attracting and benefiting from FDI  Concluding remarks and words of caution

Significance of FDI in China's Economy: Indicators, as of 2002 · FDI stock $448 billion · 220,000 foreign affiliates in operation · 400 out of 500 largest TNCs have invested in China, with 30 established regional headquarters, over 400 R&D centres · Share of FDI stock in GDP, 36% · Share of FDI inflows in GFCF 10% · Share of total industrial value-added 26% · Share of total exports 52% · Share of total tax contribution 21% · Share of total employment 11% (23.5 million)

World export market shares in 2000; and changes during Source: UNCTAD, based on the United Nations' Comtrade database.

Winner countries in the high-tech manufactures trade, Source: UNCTAD.

Winner countries in the medium-tech manufactures trade, Source: UNCTAD.

China: share of foreign affiliates in total exports, Source: UNCTAD, based on data provided by MOFTEC.

China: exports of high-technology products and shares of foreign affiliates, $ BillionPer cent Source: UNCTAD, based on Ministry of Science and Technology, China.