China has become the world leader for new research and development (R&D) facilities, as international companies flock to reap the benefits of business in the globe's most populous nation, a UN report has revealed.

Some 61 percent of foreign enterprises choose to establish new R&D centers in China, as opposed to 41 percent picking the US and 29 percent opting for India, according to a report from the UN Conference on Trade and Development.

By 2005, multinational corporations had established 700 R&D centers in China, the report said.

Foreign direct investment (FDI) has allowed certain important business sectors to develop at a brisk pace, especially the home appliance, automotive and telecommunication industries.

China has seen heavy investment from most of the world's major technology giants, with some US$7.7 billion in FDI spent in 2005, going toward the manufacture of telecommunications, computer and other electronic equipment. In total, joint ventures accounted for over 85 percent of the total US$218 billion in high-tech exports that year.

Fierce competition, on a global scale, has seen multinational companies transfer more assets and expertise to China. Hewlett-Packard Ltd invested US$18 million in staff training from 1989 to 2000, while IBM trained 100,000 software engineers in China within three years.

The considerable FDI has been an invaluable boon in the training of local talent in high-tech industries, analysts said, and has also encouraged many overseas students to return to home shores.

(Source: China Daily February 7, 2007)