Foreign investors optimistic about China; no large-scale withdrawal: MOFCOM

Foreign investors remain optimistic about China, and there’s been no large-scale withdrawal from the Chinese market, a senior official from the Ministry of Commerce (MOFCOM) said on Monday, November 18.

New statistics showed that the actual use of foreign capital in China was 69.2 billion yuan ($9.87 billion) in October, a year-on-year increase of 7.4 percent - a growth rate almost twice that of September.

In the first 10 months, the actual use of foreign capital increased by 6.6 percent year-on-year, and more than 33,000 new foreign-invested enterprises were established, data from the MOFCOM showed on Monday.

“Some export-oriented foreign-invested enterprises in some coastal areas in East China with relatively low added value have shifted production out of China, but that’s a normal market practice,” Zong Changqing, director of the department for foreign investment under the MOFCOM, told a press conference in Beijing on Monday.

On the whole, there has been no large-scale foreign capital withdrawal. Most foreign-invested enterprises still regard China as a target market, and they are very optimistic about their investment in China, Zong said.

Increasing investment, coming amid the prolonged trade war between China and the US, shows that foreign investors have recognized China’s opening-up efforts, and its attractiveness has not been affected by outside uncertainties, Dong Dengxin, director of the Finance and Securities Institute at Wuhan University, told the Global Times on Monday.

“Foreign capital will continue to flow into high-end sectors. As China has been undergoing industrial upgrading, some low-productivity work will continue to move out of China,” Dong said.

China is striving to provide a well-designed protection mechanism for foreign companies. The MOFCOM said that China is now drafting a judicial interpretation of the Foreign Investment Law, and formulation of supporting regulations is in progress.

On November 7, China enacted 20 suggestions on further improving the utilization of foreign investment in four aspects to safeguard a more “fair, transparent and predictable” business environment for foreign-invested enterprises.

The document said that all local governments and departments should not discriminate against foreign-funded enterprises in aspects such as the release of government procurement information, and they also shall not restrict the ownership form, organizational form, equity structure or investor country, as well as products or service brands of suppliers.

Bettina Schoen-Behanzin, chairwoman of the German Chamber of Commerce in China, as well as the regional representative for Asia of Freudenberg Group, told the Global Times in a previous interview that German companies still see huge opportunities in China’s market in light of its growing consumption power as well as increasing demand for foreign brands and quality.

A survey released by the German Chamber of Commerce last week showed that 67 percent of the companies surveyed intended to increase their investment in China in the next two years. One in two of all surveyed companies were likely or very likely to increase their investment in China if greater market access is granted.

Source：Global Times

A ship moors at Qingdao port on April 26, 2017. (Photo from CFP)