FDI logs 7.9 per­cent growth in 2017

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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.

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