A survey conducted by leading global professional services firm Ernst & Young suggests China is the most attractive destination for foreign investment.

Between February and March 2007, the survey asked 809 managers from various industries in European, American and Asian firms about their investment preferences.

Almost half — 48% — of international investors named China as one of their top three preferred business locations in 2007, up from 41% in the 2006 survey. The attractions are low labor costs, more competitive rates and higher productivity. Those are all pretty obvious. But the country’s infrastructure, quality of research and development, workforce education and political stability were cited as major advantages.

However, the survey revealed that China, while topping the rankings for its favorable labor costs, still lags behind in quality of workforce — only 4% of those surveyed said it is the most attractive country in terms of labor skills.

In addition, only 4%% of respondents said China is the most attractive economy in terms of R&D availability and quality, as opposed to 43% for Europe and 27% for North America.

The survey ranked investment preferences on the basis of market and access, labor and productivity, fiscal, legal, environmental and regional issues.

India’s popularity appears to be increasing fast. While 11% of investors cited it among their top three preferences in 2004, it has risen to 26% in 2007.
Source: China View