BCN-29, 30 Economic Watch: China’s FDI remains stable, quality improves

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Economic Watch: China’s FDI remains stable, quality improves

BEIJING, Aug. 13, 2018 (BSS/Xinhua) – China’s foreign direct investment
(FDI) has remained stable in scale and optimized in quality as the business
environment has become more attractive, according to industry experts.

“Looking at the data for the first half of the year (H1), foreign
investors maintained their enthusiasm in the Chinese market,” said Huo
Jianguo, vice chairman of the China Society for WTO Studies.

FDI into the Chinese mainland rose 4.1 percent year on year to 68.32
billion U.S. dollars in the first six months of 2018, according to the
Ministry of Commerce.

In particular, the number of new overseas-funded companies established in
the Chinese mainland during H1 surged 96.6 percent from a year earlier to
29,591.

In contrast, the overall situation of global direct investment was not
rosy, said Sang Baichuan, a professor at the University of International
Business and Economics.

Quoting data from the World Investment Report 2018 issued in June this
year by the United Nations Conference on Trade and Development (UNCTAD), Sang
said that global FDI flows fell by 23 percent in 2017 to 1.43 trillion U.S.
dollars.

Foreign investors are investing in a wider range of industries, increasing
cooperation, and choosing more varied channels, which shows that China
remains an ideal place for investment, said Sang.

In H1, FDI in the high-tech manufacturing industry rose 25.3 percent year
on year, led by investment growth in medical instruments, communications
equipment, and computer and office equipment.

Bai Ming, a researcher with the Chinese Academy of International Trade and
Economic Cooperation, attributed the stable FDI growth largely to a series of
measures China has taken in opening up wider.

China has revised its negative lists for foreign investment, further
widening market access in such areas as finance, transportation, energy,
resources, and agriculture.

MORE/HR/1205

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The nationwide negative list was cut to 48 items from 63 in the previous
version, while the list for pilot free trade zones decreased from 95 to 45
items. Both lists came into effect at the end of July.

Zhan Xiaoning, an official in charge of investment and enterprises at
UNCTAD, said he believed that FDI into the Chinese mainland would remain high
thanks to the investment facilitation measures.

China is providing foreign investors with bigger market opportunities,
wider investment ranges, and a better business environment, according to the
experts.

A number of foreign-funded companies have unveiled their new investment
plans in China. For example, Pepsi-Cola announced earlier this month that it
will invest another 100 million U.S. dollars to expand and renovate its food
plant in Shanghai, while BP announced in late July that it has decided to
provide 10 million U.S. dollars in support for its Chinese partner’s new
energy vehicle business.

Despite progress, there is still much room for improvement in the business
environment and services, said Sang.

BSS/AFP/HR/1210