According to experts, China’s foreign direct investment (FDI) inflows are expected to achieve a new record in 2023 and will probably rank first globally.
The strong inflows of FDI is riding on the back of the Chinese government’s ramped-up policy efforts to boost economic recovery and expand FDI inflows into key industries, inland regions and major projects. Also its FDI surge in 2012 against headwinds has indicated foreign investors’ strong confidence in the economy.
The Ministry of Commerce had earlier on made the comment that China’s FDI in actual use hit more than RMB 1.23 trillion in 2022 (or USD 189.13), up 6.3% YoY (year-on-year).
Given the domestic and external challenges, the inflows of FDI was better than expected.
Notably the growth rate for the manufacturing industry and major foreign investment projects — those with contractual foreign investment of more than $100 million each — being 46.1% and 15.3%, respectively.
Analysts have widely attributed China’s robust FDI performance to the combined effects of the country’s policy efforts and economic upgrade and expansion, which, they say, have largely offset disruptions from the epidemic and geopolitical issues.
The State Council said that China will support foreign-funded research and development centers, so that they can use large scientific research instruments, as well as reports and relevant data of major national science and technology programs, according to a circular released recently.
As consumer activity recovers amid decreasing COVID-19 disruptions and concerted policy steps are made to prop up infrastructure investment and stabilize the property sector, China’s economy is likely to see a robust rebound this year to further shore up FDI, according to analysts.
“China’s new round of reform and opening-up will encourage global companies from the high-end manufacturing sector to further transform traditional industries with smart manufacturing technology in the country,” Zhang Shaogang, vice-chairman of the China Council for the Promotion of International Trade said.
“Its industrial ecosystem and digitalization initiatives will play a crucial role in shaping the future in areas such as connected products, electric vehicles and clean power generation.”
“Considering that major FDI projects have high-standard industrial support system requirements, such as talent and industrial chains, the FDI data last year showed that foreign investors are bullish on China’s economic prospects and are placing more key links of their industrial chains in the country,” Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation was quoted as saying.
The National Development and Reform Commission said that China will improve implementation of its FDI policies and guide FDI into high-end manufacturing, modern services, high-tech and environmental protection industries, and central, western and northeastern regions.
It also vowed to expand, in an orderly manner, opening-up in telecommunication, internet, education, culture and healthcare industries, remove restrictions outside the negative list and ensure equal policy implementation for foreign-funded enterprises as Chinese ones.