Big investment tide rushes in
China is expected to adopt more measures to optimize the business climate and stabilize the expectations of foreign investors to further boost foreign capital inflows, especially in high-end sectors and central and western regions, experts and analysts say.
Despite some headwinds, the country is increasingly attractive to foreign investment, thanks to its growing weight in the global industrial chain, the expanding domestic market and policies facilitating foreign investment, they said, predicting that China will maintain its high level of growth in foreign direct investment throughout the second half of the year.
“China has incomparable advantages in attracting FDI, both in terms of its economic fundamentals and policy support,” said Wang Jingwen, director of the Macro Research Center affiliated to the China Minsheng Bank Research Institute.
FDI into the country in the first half of the year totaled 723.31 billion yuan ($107.07 billion), 17.4% more than in the corresponding period last year, the Ministry of Commerce said.
The robust growth came amid multiple external and internal challenges and uncertainties, including geopolitical issues and industrial and supply chain inconveniences caused by the recent domestic COVID-19 resurgence.
A meeting of the Political Bureau of the Communist Party of China Central Committee on July 28, presided over by President Xi Jinping, stressed that the country should create a sound policy and institutional environment for companies of different types of ownership.
Xi has also often said that China’s resolve to open up at a high standard will not change, and that China will open still wider to the world.
Wang of China Minsheng Bank said the country is likely to further boost foreign investors’ confidence through building a more marketoriented and law-based business environment that meets international standards.
China is also expected to adopt more supportive measures to promote the relocation of some industries from coastal areas to central and western regions, he said.
FDI in the services sector rose 9.2% year-on-year in the first half of this year, to 537 billion yuan, the Ministry of Commerce said. FDI in the high-tech industry grew 33.6%; in high-tech manufacturing, 31.1%; and in high-tech services, 34.4%.
Central and western regions have also been performing well in attracting FDI. It rose 25% in the central region and 43.9% in the western region.
Zhang Yansheng, chief researcher at the China Center for International Economic Exchanges, said China is expected to propel highquality development and make further endeavor to develop high-tech manufacturing and services to create more market opportunities for foreign investors and increase FDI.
Many foreign business leaders have expressed growing interest in increasing their investment in China.
The U.S. express delivery company FedEx Express said it will put into operation a new service center at Guangzhou Baiyun International Airport in Guangzhou, Guangdong province, in 2027.
“This move demonstrates our confidence in China’s economy and market growth as global trade recovers, and supports the country’s efforts to advance the dualcirculation growth pattern with smooth supply chain services,” said Eddy Chan, senior vice-president of FedEx Express and president of FedEx China.
Greg Holman, president of the China unit of Stryker Corp., a medical technology provider in the U.S., said: “Even though the COVID-19 pandemic has created temporary challenges in the second quarter, these do not change our commitment to China. We will open our China Innovation Center in Shanghai next year.”
Hiroshi Hamaguchi, chairman and president of the pharmaceuticals firm Astellas China, said his company is very optimistic about the development prospects of the Chinese economy. Astellas has upgraded its business strategy to further tap market potential in China, he said.
Bettina Schoen-Behanzin, regional representative for Asia of Freudenberg Group, said more investment in both high-tech manufacturing infrastructure and local research and development facilities has been integrated into the company’s long-term approach and innovation strategy in China.
The German conglomerate commissioned the world’s largest filter production facility in Foshan, Guangdong province, last year, and will open another factory in Chongqing next year.