More than 400 out of the world's leading 500 corporations have started businesses in China and set up nearly 400 R&D centers throughout the country, a senior Chinese legislator said Thursday.

Cheng Siwei, vice-chairman of China's National People's Congress (NPC) Standing Committee, said at the forum of the leaders from industry and commerce, one of the three forums within the World Economic Development Declaration Conference (WEDDC).

China used 52 billion US dollars of foreign direct investment ( FDI) in 2002, making it the largest FDI absorber among all developing countries for nine years in succession, according to Cheng.

More and more multinational corporations, whose businesses range from computer and telecom products, pharmaceutical to petrochemical and power generation production, have extended their production network into China, he said. The investment- and technology-intensive projects funded by these overseas investors also increased the high-tech products export of China, he said.

Cheng said that investment from multinational corporations have increased in recent years. A number of corporations have set up their Asian-Pacific regional headquarters in China or founded regional research and development centers and regional operation centers in China, gaining unexpected economic returns.

The multinational corporations are also prone to take over local companies rather than forming new companies, he said. He attributed the trend to China's serious implementation of its commitments after the admission into the World Trade Organization and China's new round of economic growth.

The Chinese government has also created an environment favorable to the acquisition or takeover of local companies for multinational corporations, he said.

Multinational corporations also made efforts to form a complete production chain based on their previous projects, such as the extension of production line to the upstream and downstream of manufacturing industries, or to related service sectors, such as financial, logistics, telecom service and consultancy areas, he said.

According to Cheng, the Chinese government has actively improved its legal system on foreign investment for creating a fair, open and transparent business environment. Relevant government departments have undertaken study for the overseas- funded enterprises to set up financial companies and obtain import and export rights, he said.

Cheng called on the multinational corporations to introduce more advanced technologies in China, enhance localization efforts, increase added-value of their local-made products and participate in the renovation and reorganization of China's state-owned enterprises.

Cheng said that China's western development and the rejuvenation of the old industrial bases in northeastern China also provided opportunities for multinational corporations to expand their China-related businesses.

WEDDC is a two-day event aiming to offer a platform for business people and officials to exchange views on world and China economy.

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