In a report released by the Ministry of Commerce on Friday, it was revealed that foreign direct investment (FDI) in the Chinese mainland during the first eight months of this year totalled an impressive US$118 billion. While this figure reflects a 5.1 percent decrease compared to the previous year, it is important to note the underlying factors contributing to this decline, as elucidated by a ministry official.
The official cited two primary reasons for the dip in FDI. Firstly, the global economic recovery has been unfolding at a gradual pace, influencing investment patterns across the globe. Secondly, last year’s recorded FDI figures established a notably high benchmark. Hence, the decrease in FDI in 2022, when viewed within this context, takes on a nuanced perspective.
Despite the overall dip in FDI, the period witnessed a remarkable surge in the establishment of new foreign-invested companies, with 33,154 such firms setting up operations across China. This increase, amounting to a substantial 33 percent year-on-year rise, underscores the unwavering confidence that foreign businesses continue to exhibit in making long-term investments within the Chinese market.
When examining specific sectors, it becomes evident that FDI in manufacturing surged by 6.8 percent year on year. Particularly noteworthy is the impressive 19.7 percent increase in FDI in high-tech manufacturing, signalling an enhancement in the quality of Chinese industries that are attracting foreign investment.
Furthermore, data from the ministry highlights significant spikes in FDI from several countries. Notably, FDI from the United Kingdom recorded a remarkable increase of 132.6 percent, while Canada and France witnessed growth rates of 111.2 percent and 105.6 percent, respectively. These statistics signify the sustained global interest in investing in the Chinese market, despite the prevailing challenges.
To fortify and streamline the foreign investment landscape, China’s State Council recently introduced a comprehensive set of guidelines comprising 24 specific measures. These measures are designed to enhance China’s attractiveness to foreign investors and foster greater foreign investment inflows. They encompass initiatives such as expanding pilot areas to offer more extensive service opportunities, incentivising foreign firms and their research and development centres to spearhead significant scientific and technological projects, facilitating the mobility of senior executives, technicians, and their families, and enhancing the capabilities of local government offices responsible for managing foreign investment.
Looking ahead, the Ministry of Commerce is set to collaborate with regional authorities and pertinent departments to ensure the effective implementation of these guidelines, marking a significant stride towards fortifying China’s position as a prime destination for foreign investment amidst a dynamically evolving global economic landscape.