FDI logs 7.9 percent growth in 2017
Policy measures boost inflows into high-tech sector
such as electric, telecommunication and medical device manufacturing have become popular investment choices for global companies as China undergoes an industrial and service upgrading boom.
“The steady momentum of FDI was attributed to government measures like easing restrictions in its 11 free trade zones and simplified procedures for investment entrance,” says Tang Wenhong, director-general of the Ministry of Commerce’s Department of Foreign Investment Administration.
The number of newly established foreign companies rose to 35,652 last year, up by 27.8 percent year-on-year, the ministry said in the statement.
Foreign companies, which comprised less than 3 percent of the total enterprises operating on the mainland, contributed to a quarter of the country’s manufacturing business profits and one-fifth of tax revenue, it said.
In December, FDI into the Chinese mainland fell by 9.2 percent year-onyear to 73.94 billion yuan.
The country will face relatively large external pressures to attract foreign investment in 2018, the ministry said in the statement.
As for nonfinancial outbound direct investment in 2017, the ministry’s data show the figure decreased by nearly 30 percent year-on-year to $120.08 billion, which covers 6,236 overseas businesses from 174 countries and regions.
“The sharp decline reflects the effective reining in of irrational outbound investment,” says Li Guanghui, vice-president of the Chinese Academy of International Trade and Economic Cooperation in Beijing.
Han Yong, commercial counselor at the Department of Outward Investment and Economic Cooperation of the Ministry of Commerce, says outbound investment mainly flowed into sectors such as leasing and business services, wholesale and retail, manufacturing and information transmission last year. It did not go to the property, sports or entertainment industries.
China has been taking a host of measures to curb irrational offshore investment activities and ensure the authenticity of outbound investment.
In a document released in August, the State Council said overseas investment in areas including real estate, hotels, cinemas and entertainment would be limited, while investment in sectors such as gambling would be banned.
The National Development and Reform Commission, China’s economic policy regulator, released a new draft rule in November on outbound investment, including stipulations on the investment activities of enterprises established overseas by domestic companies.
Outbound investment to countries and regions involved in the Belt and Road Initiative totaled $14.36 billion in 2017.