Nation moves up the FDI ladder in 2017

China became the world’s second-largest recipient of foreign direct investment in 2017, moving up from third place in 2016, a new United Nations report said.

Ranked just behind the United States, China garnered FDI worth $136 billion in 2017, up 2 percent year-on-year. The rise was driven by a 28 percent increase in the number of foreign entities, to over 35,650 in 2017, according to the United Nations Conference on Trade and Development’s 2018 World Investment Report.

“FDI in the country’s free trade zones increased, and government efforts to achieve a better geographical spread of investment led to inflows to Central China growing faster than other regions,” the report said.

China was ranked third in outbound investment with deals worth $125 billion, a 36 percent year-on-year decline, mainly due to the readjusted policies since 2015. Affected by such major decline in China, outward flows from developing economies fell by 6 percent to $381 billion in 2017.

The report predicted FDI to China will continue to grow due to the government’s recently announced liberalization plans.

Wang Shouwen, vice-minister of commerce, expressed confidence in the country’s ability to attract investment in the remaining six months of 2018.

“The global FDI has slumped by 23 percent in 2017 and the FDI performance for the first quarter of the year from the major countries was also not ideal,” said Wang at a news conference on Friday. “Despite a tough global environment, China’s FDI from January to April increased 0.1 percent. It is a hard earned performance.”

“Recently the American Chamber of Commerce released a report saying a third of the US companies will increase their investment in China by at least 10 percent,” he added. “It reflected the for- eign investors’ confidence in China’s plan to liberalize, facilitate, promote and protect investment.”

According to the report by the UN, global flows of foreign direct investment dropped by 23 percent in 2017.

“The negative trend is a long-term concern for policymakers worldwide, especially for developing countries where international investment is indispensable for sustainable industrial development,” Antonio Guterres, secretary-general of the UN, said.