China’s FDI rises 6.2% to record high in 2020 despite pandemic

China’s foreign direct investment ( FDI) jumped 6.2 percent year- on- year to reach a record high of 999.98 billion yuan ($ 144.37 billion) last year, data from the Ministry of Commerce ( MOFCOM) showed on Wednesday.

Analysts said that the country is poised to overtake the US and regain the title as the world’s top destination for FDI, thanks to its effective anti- epidemic measures that allowed factories to restart while production in the rest of the world was still partly grounded.

China’s actual use of FDI rose in three dimensions – total amount, range of growth and world share, according to a statement on the website of the MOFCOM. It noted that such gains bucked the global trend of slumping FDI amid the COVID- 19 pandemic.

FDI into China from the top 15 countries and regions surged 6.4 percent year- on- year, taking up 98 percent of the FDI inflow.

Investments from the Netherlands and the UK led, with growth rates of 47.6 percent and 30.7 percent, respectively. Investment from ASEAN to China was up 0.7 percent.

More FDI went into the services and high- technology sectors. The actual use of FDI in the services industries grew 13.9 percent, while that of high- tech industries rose 11.4 percent, according to statistics complied by the MOFCOM.

Globally, FDI flows are likely to have dived 30- 40 percent year- on- year in 2020, according to a report by UNCTAD.

China could take the crown from the US as the hottest spot for foreign investment in the next couple of years, analysts said, highlighting the country’s ability to secure stable production for the world when global supply chains have been fractured by the coronavirus outbreak.

“The huge FDI flows to China are in stark contrast to other major economies last year, after investment fled abroad due to uncertainties over production and coronavirus control,” Cong Yi, a professor at the Tianjin University of Finance and Economics, told the Global Times.