China still strong magnet for foreign investment: experts
China remains a strong magnet for foreign investment in a pandemic-jolted world, as revealed by the latest data, and experts believe the trend will continue thanks to the country's continued opening-up and improved business environment.
BEIJING, Feb. 16 -- After hitting a record high last year, foreign direct investment (FDI) into the Chinese mainland, in actual use, expanded 11.6 per cent year on year to 102.28 billion yuan in January, the Ministry of Commerce (MOC) has said. In U.S. dollar terms, the inflow went up 17.6 per cent to 15.84 billion dollars.
The growth last month was the fastest and the first double-digit increase for the same period since 2016.
Experts called the results hard-won and said they reflected China's undented attraction for foreign capital amid external uncertainties.
Last year's robust FDI momentum sustained into this year as global capital flows accelerated and domestically the country's stable economic fundamentals, improved business environment and new foreign-investment law reassured foreign investors, said Zhang Jianping with the MOC's research institute.
A recent MOC survey showed that 94.9 per cent of over 3,000 foreign businesses operating in China have a largely optimistic outlook.
China has ramped up efforts to further open up the economy. Shortened negative list for foreign investment came into force on Jan. 1, with off-limit items cut to 31 from 33 a year ago. Notably, the foreign capital cap in the auto industry was removed, and manufacturing restrictions in pilot free trade zones were also reduced to zero.
In January, foreign investment in the service industry went up 12.2 per cent year on year, while the inflow to high-tech industries surged 26.1 per cent.
Liu Xiangdong, a researcher with the China Center for International Economic Exchanges, said the rapid growth in high-tech and service investment mirrors an ever optimized economy and the newly important role of foreign capital in the country's economic landscape.
Looking forward, while the pandemic will still weigh on the global economy, experts believe China's FDI inflow can maintain the impetus this year despite the high comparable base in 2021 and the possibility of softened transnational investment activities around the world.
MOC spokesperson Shu Jueting has said China will further expand its high-level opening-up, enhance its services for foreign-funded firms and projects, and make more efforts to optimize the business environment in 2022.
The ministry will guide more foreign capital to invest in emerging fields, including advanced manufacturing, modern services, high-tech, energy conservation, environmental protection and the digital economy, Shu said.
Part of the country's FDI impetus will also come from the less tapped central and western regions, which saw FDI inflows up significantly by 46.2 per cent and 42.2 per cent, respectively, in January.
Foreign businesses investing in those areas can have much lower operating costs and enjoy various policy supports, such as tax breaks, Zhang said, stressing that there is huge potential for boosting foreign investment.