In January, there was a rare declining in both areas of attraction of foreign investment and overseas investment. However, according to the latest data published by Ministry of Commerce on February 16, attraction of foreign investment in high-end manufacturing has been growing against the declining trend. About this issue, Sun Jiwen, the press spokesman of Ministry of Commerce, said at the press conference that the trend of attraction of foreign investment is consistent with the direction of industry transformation and upgrading in China. It is estimated that, based on volume of overseas investment for the year of 2017, the overseas investment is heading to a “more stable and healthy” direction.

 

According to the data, in January of this year, the actual amount of using foreign investment in China was 80.1 billion RMB( or 12 billion US dollars), which fell 9.2% compared to the same period of last year, and overseas investment was 53.27 billion RMB ( 7.73 billion US dollars), which fell 35.7% compared to the same period of last year and 4.6% compared to last period.

 

Despite the declining of the total amount, attraction of foreign investment and overseas investment have been increasing in subdivision domains of high-end manufacturing and services. Foreign investment invested in high-end manufacturing and services is growing, and the trend of absorbing foreign investment is consistent with the direction of industry transformation and upgrading.

 

China’s high-end manufacturing attracts more FDI(foreign direct investment) despite of decline, and overseas investment tends to better

While the actual amount of using foreign investment in manufacturing has decreased 9.5% compared to the same period of last year, there was 5.42 billion RMB invested in high tech sector, which increased 39.9% compared to the same period of last year. Among them, the actual amount of using foreign investment in electronic and communication equipment manufacturing and computer and office equipment manufacturing has increased by 114.3% and 127% respectively.

 

From the perspective of the source of investment, the actual amount of investment from Hong Kong of China, Japan and 28 countries of EU have increased by 21.1%, 24.2% and 27.8% respectively.

 

In the aspect of overseas investment, capital heading to real estate and cultural and sports and entertainment industry has declined 84.3% and 93.3% respectively. At the same time, attention has been drawn to entity economy and recent emergent industries. In January, overseas investment mainly flowed to manufacturing, information transmission and software and information technology services, and the capital amount of these sectors increased by 79.4% and 33.1% respectively, which took up 37.5% and 11.5% of this year compared to 13.4% and 5.6% from the same period of last year. And 2.29 billion dollars were flowing to equipment manufacturing, which was 2.7 times the same period of last year.

 

Furthermore, China’s overseas investment to countries along the “ One Belt, One Road ” initiative is active. Direct investment of non-financial area in countries along the initiative has taken up 10.6% of total overseas investment, which increases 2.1 percentage point compared to the year of 2016. Channel for enterprises to invest overseas or deal foreign capital financing businesses is tending toward to diverse. In January, the two biggest overseas investment projects were completed through overseas financing, and the total amount accumulated to 8.38 billion dollars.

 

Sun Jiwen, the press spokesman of Ministry of Commerce, pointed out that the reason why China’s attraction of foreign investment declined in January is that “ the capital were flew in last year, which lifted up the capital base, and also the the vacation of Spring Festival also affected the attraction of foreign investment”. He also said that although there were some fluctuations in January, it could not represent the trend for the whole year.

 

Sun Jiwen said that, China, from a long-term point of view, still has prominent advantages and circumstances for absorbing foreign investment. It was estimated that the average annual growth of China’s economy would keep up at 6.5% and more during the period of the 13^th five-year plan, and would still be one of the fastest growth markets in the world. With the deepening of the reform and expanding of the opening up, modern market system has been improved and business environment has been optimized, and new driving force and competitive edge are growing. All of these factors have led to the competitive advantages for China to absorb foreign investment.

 

The overseas investment of 2017 would represent a steady and good trend under the circumstance of the world economy lacking of driving force. Ministry of Commerce supports powerful national enterprises to set up virtual and legitimate activities for overseas investment, and to participate into the common construction of “the Belt and Road”, and to develop international cooperation on productivity to integrate into worldwide industry chain and value chain.

 

Source: Translated from Invest Guangzhou, Feb. 20, 2017