Steady growth helps attract foreign capital

In the first half of 2021, China utilized 607.84 billion yuan ($94.03 billion) of foreign capital, a year-onyear increase of 28.7 percent, according to Ministry of Commerce data. In contrast, global foreign direct investment in 2020 dropped by 42 percent compared with 2019, with developed economies suffering the most.

In a word, the Chinese market has proved especially attractive to international capital, even as other major economies face recession.

There are several reasons for this. First, China has earned the trust of global investors by continuously opening up its economy, as promised.

At a time when the world faces rising protectionism and unilateralism, China has doggedly defended the multilateral trade and investment system, in order to help the global economy realize its full potential. China implemented the Hainan free trade port law in June and held the Third China International Import Expo in November, gaining further trust of the investors in its continued opening up.

Second, China has been constantly improving its business environment, so as to attract more foreign capital. In its blueprint for the 14th Five-Year Plan (2021-25), the Ministry of Commerce has said, among other things, it will lift the curbs that are not on the negative list to further open up the economy.

In its annual report, the American Chamber of Commerce in China said that about 50 percent of its member enterprises recognize the constantly improving business environment in China, while 75 percent are confident the good conditions in China will continue.

According to the National Bureau of Statistics, China’s economic growth rate in the first half of 2021 was as high as 12.7 percent, with the average growth rate in the last two years being 5.3 percent. A steady and moderately high growth helps attract foreign capital.

It is, therefore, the Chinese economy’s excellent performance as well as its constantly improving business environment that are attracting more foreign capital to the country.