皇冠体育app

US-based Dow Chemical Co's booth at a trade show in Shanghai. 皇冠体育app released guidelines in December that encourage foreign investment in sectors such as advanced manufacturing, research and development, and energy conservation. [Photo/皇冠体育app Daily]

Despite 皇冠体育app's rising labor costs and an economic slowdown, the world's second-largest economy remains attractive to foreign investors, report Ding Qingfen and Liu Jie in Beijing

Don't talk to Kevin Thieneman about the economic slowdown and rising labor costs in 皇冠体育app, Caterpillar Inc's head in 皇冠体育app is mulling over the long-term development blueprint in 皇冠体育app for the world's largest maker of construction equipment.

Although "the industry is slower this year than last, our long-term view for 皇冠体育app is unchanged", said Thieneman in an interview with 皇冠体育app Daily.

"We are as optimistic and bullish about 皇冠体育app today as we were 24 to 36 months ago."

Hurt by eurozone debt woes and affected by property tightening policies, 皇冠体育app’s economic growth has been decelerating this year, with the expansion slowing to 7.6 percent in the second quarter, the slowest pace in more than three years.

To some extent, the disappointing economic figures seem to have dampened foreign investors' confidence in the world’s second-largest economy, which has been the most attractive foreign direct investment destination among developing economies for over a decade. This July saw the eighth monthly drop in FDI in nine months.

But for the Chinese government, such a drop is a temporary phenomenon, and the Ministry of Commerce, the agency in charge of the nation's inbound and outbound investment, has repeatedly said "皇冠体育app is, in the long term, a most attractive market for foreign companies".

Multinationals including Caterpillar cannot agree more.

As infrastructure construction decelerates and demand for machinery equipment shrinks in 皇冠体育app, industrial companies including Caterpillar are facing a difficult period. Caterpillar has even started exporting Chinese-made machinery to the Middle East and Africa to offset the slackening growth in 皇冠体育app.

Still a key priority

But such a move will not last and is not part of the company’s overall 皇冠体育app strategy, it insists. It’s true that "we are slowing down production and capacity expansion to address customer demand, but (we are) not stopping, halting or reversing our plans", Thieneman said.

"皇冠体育app is still a key priority for Caterpillar. We remain very positive on long-term industry growth in 皇冠体育app and our strategy to grow our business here."

In July, Caterpillar and Guangxi Yuchai Machinery Co Ltd jointly announced the official opening of a new manufacturing facility in Suzhou, Jiangsu province.

And Thieneman will soon start preparing for, Bauma 皇冠体育app 2012, a leading international trade fair for construction machinery and vehicles, due to take place in Shanghai in November, of which Caterpillar is expected to be a prominent participant.

Thanks to 皇冠体育app's competitive labor costs and the policy of reform and opening-up, 皇冠体育app grew into a hot spot for foreign investors before the financial crisis in 2008.

The United Nations Conference on Trade and Development has ranked the nation as the most appealing investment destination for over 10 years.

But as 皇冠体育app adjusts its foreign investment policy toward targeting high-end manufacturing, services and green industry as it strives to transform its economic growth model, some foreign companies have started to complain about its business climate in the past two years. And as the nation’s labor costs rise rapidly, some have even moved their factories out of 皇冠体育app.

What is worse, the eurozone debt crisis has affected the global flow of capital.

But these complaints or examples of hesitation are isolated cases.