By Jiang Wei (China Daily)
Updated: 2007-08-14 09:14

A group of foreign businesspeople at the China International Fair for Investment and Trade in Xiamen, East China's Fujian Province. [File Photo]

China's realized foreign direct investment (FDI) increased nearly 13 percent year-on-year from January to July, driven by rapid growth in the real estate, stock and forex markets.

The country received $36.93 billion in FDI in the first seven months of this year, up 12.92 percent from a year earlier, the Ministry of Commerce said yesterday. It approved 21,676 foreign enterprises in this period, down 4.81 percent from last year.

Related readings:  June FDI rises 21.91% to $6.63b  Central bank vows to prevent overheating  China tightens rules on foreign property investors  More foreign capital flows in property sector

Foreign investors are expected to set up more operations in China this year, in particular in the second half, to avail the last opportunity to enjoy favorable corporate income taxes, said Lu Jinyong, a researcher at the University of International Business and Economics.

From next year, income tax rates for domestic and foreign companies will be unified at 25 percent. Domestic companies currently pay 33 percent income tax while foreign companies, which have tax waivers and incentives, pay an average of 15 percent.

Foreign enterprises registered before the rate unification will be taxed at the favorable rates for another five years.

The figures released by the ministry do not include investments in the financial sector, such as banking, insurance and securities. The ministry also did not give the amount for contracted FDI agreements yet to be fulfilled, as opposed to the ones realized.

Lu expects FDI in China's non-financial sectors to exceed $70 billion this year, compared with $63 billion last year.

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