FDI jumps significant 26.1% in Jan- Apr

▶ Figure shows China’s key role for multinationals, global economy

China’s actual use of foreign capital recorded a significant jump of 26.1 percent on a yearly basis from January to April, reaching $ 74.47 billion, despite challenges posed by COVID- 19 outbreaks in several major Chinese cities, according to official data on Thursday.

The better- than- expected figure serves as a strong rebuttal to some Western media’s “capital withdrawal” hype, and demonstrates that temporary economic disruptions caused by the Omicron variant won’t undermine the attractiveness of the Chinese market to foreign investors in the long run, observers said.

The rapid growth also comes on a high base last year, when China’s actual use of foreign investment surged 38.6 percent in the first four months, Shu Jueting, a spokesperson for China’s Commerce Ministry ( MOFCOM), told a press conference on Thursday.

Large projects have been running in a stable fashion, Shu said, adding that all localities have worked hard to overcome the impact of the epidemic and actively carry out investment promotion.

In the first four months, China added 185 large- scale projects with contracted foreign capital of more than $ 100 million, which is equivalent to an average of 1.5 large- scale foreign- funded projects landing every day.

The continued rise in foreign investment flows into China is proof that Chinese market has remained a bonanza for foreign investors, said Cao Heping, an economist from Peking University.

“The country’s COVID- 19 containment policy is shown to have mobilized wide- ranging resources to imbue [ society] with a sense of safety and security,” Cao said.

In recent weeks, stringent anti- epidemic measures were adopted in some key Chinese cities, including Shanghai and Beijing, to curb the rapid spread of the Omicron variant and bring a sound rebound after temporary economic disruptions.

Yet some Western media outlets are exaggerating the situation, hyping the “investor flight” theory, warning that such moves will result in a large- scale retreat of foreign firms and undermine China’s attractiveness in the long run.

Last year, China was among the world’s best- performing markets in terms of the attraction of foreign direct investment, according to Cao.

China’s actual use of foreign investment jumped 14.9 percent year- on- year to 1.15 trillion yuan in 2021, scaling an all- time high, official data showed.

“Noise” as regards fluctuations in foreign capital flows mostly indicates shortterm speculative moves in the money and capital markets, Cao emphasized.

In a new sign that multinationals’ confidence in the country’s outlook won’t be deterred by short- term difficulties, L’Oréal founded its first investment company in China, Shanghai Meicifang Investment Co, in Shanghai on May 8.

In the first four months, multinationals such as Volkswagen of Germany, Posco of South Korea, Costco of the US, Hitachi of Japan and others have achieved good results of their investment in China, Shu said.

“It’s increasingly the case that multinationals base their investment on not merely the sheer size of the Chinese market, but China’s rising profile in the international division of industries, factoring its complete industrial system and future industrial and consumption upgrades,” said Bai Ming, a trade expert from the Chinese Academy of International Trade and Economic Cooperation.