China witnesses sound growth of foreign investment

By Luo Shanshan, People's Daily

While maintaining steady economic growth, China continued to promote high-quality development this year, demonstrating strong resilience and vitality which appeal for foreign investment.

In the context of economic globalization, enterprises are naturally drawn to vibrant markets. In the first three quarters of the year, foreign direct investment (FDI) into China continued to grow steadily.

In the same period, 30,871 foreign-invested companies were newly established. The actual use of foreign capital reached 683.21 billion yuan, increasing by 6.5 percent year on year.

Main investment sources remained stable from January to September. The investment from Japan, South Korea, and Singapore increased by 4 percent, 28.7 percent and 27.8 percent respectively year on year.

The paid-in foreign investment from countries along the Belt and Road rose by 14.9 percent year on year and that from the Association of Southeast Asian Nations (ASEAN) by 17.5 percent.

According to the World Investment Report 2019 published by the United Nations Conference on Trade and Development, global FDI flows slid for the third consecutive year in 2018 to $1.3 trillion–the lowest since the international financial crisis in 2008.

China has made remarkable achievements in the use of foreign investment, despite the global trade and investment slowdown, said Zhang Fei, deputy director of the Research Center for Foreign Investment of the  Chinese Academy of International Trade and Economic Cooperation.

Accenture, a multinational professional services company has recently opened a digital hub in Shanghai to better serve its Chinese clients. It is the company’s second innovation hub in China.

China has entered a phase of high-quality development, where it continuously optimizes its industrial and demand structure, said Zhang Yansheng, a researcher with the China Center for International Economic Exchanges, adding that this provides an unmissable opportunity for foreign companies to participate in China's economic transformation and upgrading.

China's high-tech industry maintained rapid growth in drawing foreign investment. During the January-September period, the actual use of foreign capital in high-tech industry increased to 203.8 billion yuan by 39.8 percent year on year, accounting for 29.8 percent of the total FDI.

The actual use of foreign capital in high-tech manufacturing reached 74.6 billion yuan, with an increase of 13.7 percent year on year, and that in high-tech service sector stood at 129.2 billion yuan, rising by 61.3 percent.

China has established a complete manufacturing industry system with strong supporting capacity. The output of more than 220 industrial products ranks first in the world, according to Zhang.

With a domestic market that continues to expand at a steady pace, China provides plenty of room for foreign investment. The country has become a major innovation power in the world, with improving technologies and an increasing number of high-quality talents. Besides, it has continuously improved the infrastructure and reduced the logistics costs.

                              

These advantages make China more competitive in the new round of international industrial transfer, helping it attract, gather and integrate global high-end innovation factors, improving the quality and synergy in foreign capital utilization, Zhang pointed out.

The steady growth of FDI is attributed to the country's policies to broaden opening-up and optimize the business environment.

China's door has opened wider. At the end of June, the country rolled out two revised negative lists, one for the piloted free trade zones (FTZ) and the other for the rest of the country, to introduce greater opening-up in agriculture, manufacturing and service sectors.

This was the fifth time that China had revised the negative lists for market access. Pilot FTZs now have 37 listed items for foreign investors while non-FTZ areas are required to implement 40 items, compared with 190 six years ago. Besides, China has hugely enlarged the encouraged industries for foreign investment.

The business environment has further improved. China has adopted the foreign investment law to encourage overseas investment, protect the rightful benefits of foreign investors and infuse confidence and expectation into global companies.

Meanwhile, by streamlining the government, delegating power and improving government services, China has simplified the administrative procedures and greatly improved the quality and efficiency of government services, bringing more convenience for foreign companies.

China has also slashed taxes and fees to make more companies willing to explore the Chinese market.

According to the 2019 China Business Climate Survey Report released by the American Chamber of Commerce in China, more than 60 percent of member companies still list the Chinese market high on their lists of priorities.

A survey conducted by Invesco Ltd., an American independent investment management company, revealed that the central banks and national funds from all over the world have continued to increase investment in China.

China will promote investment liberalization and facilitation, further protect the interests of overseas investors, and create a more stable, fair, transparent and predictable business environment to provide better services for foreign enterprises, according to an official from the Ministry of Commerce.

Visitors watch robot exhibits at the second Western China International Fair for Investment and Trade held at Chongqing International Expo Center starting from May 16th, 2019. (Photo: Sun Kaifang)