China can be safe haven for FDI during pandemic
The UN Conference on Trade and Development has warned that global foreign direct investment could drop by up to 15 percent due to the novel coronavirus outbreak, hitting its lowest level since the 2008 global financial crisis. Before the outbreak of the virus, the organization had projected the FDI could surge by 5 percent this year.
Although China will not be immune to the effects of the pandemic, its fundamentals remain unchanged so it will retain its attractiveness for FDI. China has a comparatively complete industry chain, and has unique comprehensive advantages based on efficiency, scale, resources and market.
But China needs to maintain its domestic supply chains to boost the resumption of industrial production and business operations, as the country has overcome the most difficult part of its fight against the virus, and should take advantage of all favorable conditions to take the initiative to revive the economy.
The recovery of the Chinese economy will not only help other countries source crucial medical protective items, such as surgical masks and ventilators, but also attract foreign investment to China where the pandemic’s influence on its industry will be lighter than on many other countries.
The resumption of logistics and robust domestic demand means China will be one of the few countries during the pandemic that can help to sustain the basic operation of industries that no foreign investors can afford to ignore.
Not to mention the series of proinvestment and pro-business government policies that have been rolled out to accelerate the revving up of the economy.
As the first major economy that has explored effective means to balance pandemic control and economic development, China has more favorable conditions than the other main FDI destinations during the pandemic.
The government should take the opportunity to further improve the country’s business environment to pull investment to the country, in a bid to turn a crisis into an opportunity.