Fewer Foreign Devils

At first glance, the statistics are startling: Foreign investment in China dropped 50% in the first quarter compared with the same period in '93. But it's not as bad as it seems. For one thing, the new tax system, which trims preferential treatment for foreign investors, may be contributing to the falloff. There's also some heavy competition from the rest of booming Asia. Indonesia recently liberalized investment regulations, and Vietnam and India are opening up as well. Taiwanese interest flagged after 24 tourists from Taiwan were murdered in China on Mar. 31: Investment fell off 60% from a year earlier in April alone. Given China's growing labor unrest and skyrocketing property prices, some investors may indeed be having second thoughts.

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