China has become the most active country in the world for new research and development (R&D) facilities, as companies from around the globe seek to adapt in and benefit from the most populous nation, a UN report said.

Some 61 percent of foreign enterprises choose to establish new R&D centers in China, compared to 41 percent in the US and 29 percent in India, according to a report from the United Nations 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 accelerated the development of numerous important business sectors, especially the home appliance, automotive and telecommunication industries.

Nearly all the world's major technology giants have invested heavily in China, with some 7.7 billion U.S. dollars in FDI made by 2005 for the manufacture of telecommunication, computer and other electronic equipment. Joint ventures accounted for over 85 percent of the total 218 billion dollars in high-tech exports that year.

Fierce competition, both domestic and international, has seen multinational companies transfer more assets and expertise to China. Hewlett-Packard Ltd invested 18 million dollars in staff training from 1989 to 2000, while IBM trained 100,000 software engineers in China within three years.

The enormous amount of FDI has contributed greatly to the development of local talent in high-tech industries, analysts said, and also encouraged many overseas students to return.