The year of 2016 saw a drastic decline of global FDI, said the report issued by United Nations Conference on Trade and Development(UNCTAD) headquartered in Geneva on February 1. On the contrary, China’s FDI inflow hit 139 billion USD in 2016, increasing 2.3% than that in 2015, and ranked the 3^rd in the world.

According to the report, due to the slack global economic growth and trade, the global FDI inflow dropped 13% to 1.52 trillion USD in 2016. The total FDI flowing to developed economies decreased 9% to 872 billion USD from the historical high in 2015. Economic growth slowdown and bulk goods price slump produced great influence to the FDI inflow of developing economies which saw an overall reduction of 20% to 600 billion USD last year. James X. Zhan, director of Investment and Enterprise Division of UNCTAD, said that China’s FDI utilization structure continued optimization and quality improvement last year in addition to the historical high in FDI quantity. FDI continued favoring capital- and technology-intensive industries and sectors with high added value, and leaving labor-intensive industries.

Many survey reports of international agencies showed that foreign enterprises enthusiasm on investing in China had been gradually increasing instead of decreasing. For instance, China is still the world’s 2^nd most popular investment destination, said the 2016 World Investment Report by UNCTAD. AmCham China’s survey indicates that more than 60% of its enterprise members regard China as one of the world’s three major investment destinations. The European Union Chamber of Commerce in China(EUCCC)’s study also shows that 50% of EU’s enterprises will expand their investment in China. “Relevant data prove again that China is still a land attracting FDI, ” said Duncan Freeman, senior research fellow of China-Europe Institute and EU International Relations and Diplomacy Department of the College of Europe, at an interview. Not long ago, western media said China was no longer a major FDI destination. It was obviously not true. China’s rapid economic development and enormous market are attract FDI like a magnet.

James X. Zhan agreed to the reports of the agencies. In his opinion, China will still be one of the world’s most attractive FDI destinations in 2017. China will continue a high level of FDI inflow.  China’s economic growth will continue a high level in the world, its industrial structure will continuously upgrade, and the market-oriented FDI will keep growing hopefully, he said. Meanwhile, with the continuous deepening of China’s foreign investment management system reform, China’s opening-up fields to foreign investment will be further expanded. These will inject new fuel for the inflow of FDI.

Currently, some new trends in global political circles, such as the Brexit, the new American presidency’s announcement of renegotiating the North American Free Trade Agreement and quitting the Trans-Pacific Partnership Agreement, and the upcoming election of major European countries, may intensify the uncertainty of upcoming FDI flow. “At the critical moment when the world’s main economies oppose the globalization with trade protectionism, China energetically supports the globalization and injects power to the sustainable development of global economy,” said George Tzogopoulos, a scholar of Nice Europe Institute in France, to the reporter. Chinese president Xi Jinping made an important speech at the opening ceremony of the World Economic Forum Annual Meeting and gave a powerful signal to the world: China enthusiastically embraces globalization, makes all efforts in boosting global economic recovery and growth, and opens its door to the world all along. “In comparison with the world’s other major economies, China is stable and reliable in attracting FDI,” said Tzogopoulos.

Analysts believed that, in the upcoming five years, China’s domestic market demand will reach 10 trillion USD. Chinese economy boasts huge energy and potential, which will bring enormous opportunities for foreign investors. Moreover, with the acceleration of China’s opening-up, recently, the State Council considered and adopted the Notification on Some Measures for Expanding Opening-up and Actively Utilizing Foreign Investment. These measures further release, loosen or orderly open the fields formerly restricted for foreign investment’s access, which will bring good investment opportunities for foreign investment.

 

Resource: Translated from Invest Guangzhou, Feb. 4, 2017