The foreign investment of China shows a good development momentum in January 2015, introduced by Shen Danyang, spokesman of the Ministry of Commerce, at the routine news conference held on February 16. In the month, China saw    incorporation of 2,266 new foreign-invested enterprises, up 31.8% year-on-year (YoY), contractual foreign investment US$33.21 billion, up 126.2% YoY, actually used foreign investment US$13.92 billion, up 29.4% YoY. Of that, the financial service industry enjoyed a significant growth in foreign investment. In January, the service industry actually used US$9.18 billion of foreign investment, accounting for 66% of the total, up 45.1% YoY. The other financial service industry (excluding banking, securities and insurance) has 313 newly established foreign-funded enterprises, up 317.3% YoY, contractual foreign investment US$9.49 billion, up 476.5% YoY, and actually used foreign investment US$4.62 billion, up 1261.7% YoY.

 

In 2014, China has surpassed the United States as the world’s largest recipient of global foreign direct investment (FDI) for the first time. On the one hand, this reflects that China has huge development potential, complete infrastructure, strong industrial supporting capability, excellent investment environment and advantages in comprehensive competition that ensure a high attraction to multinational corporations. On the other hand, this change reflects that the tireless efforts of the Chinese government have led to a good result. Since the 18^th National Congress of the CPC, the Chinese government has accelerated structure of a new open economic system, further enlarged opening up, and increased protection to the legal rights and interests of foreign-funded enterprises. All of these measures are important reasons for China to maintain a relative high level of foreign investment, says Shen.

 

However, Shen also pointed out that this change of position is also partly impacted by chance factors. In 2014 the US$130 billion mega-buy-back of shares by Verizon (United States) from Vodafone (United Kingdom) significantly reduced the equity component of FDI inflows to the United States, resulting in a sharp decline of US$86 billion of FDI of the United States in 2014. This deal also lowered the position of the United States from the first in 2013 to the third. Without this deal, the United States would still hold the first place in the FDI flow.

 

Shen said the slow recovery of the world economy, increasingly intensive competition in attracting investment across the globe, relatively high pressure of economic downturn have caused some difficulties and challenges to China in attracting foreign investment, but no major changes occurred to the fundamentals. More importantly, the measures such as further promoting reform and opening up have offered strong power for China to maintain the size and improve quality of foreign investment. Therefore it is predicted that foreign investment of China will remain stable in 2015.

 

In the new year, China will continuously deepen the foreign investment management mechanism reform, unify the laws and regulations concerning domestic and foreign investment, significantly reduce limits on access of foreign investment, further promote opening up of various fields, and push the relevant departments to improve quality of administration and law enforcement and protect legal rights and interests of investors and enterprises. These measures will optimize the foreign investment environment and attract foreign investors to China.

 

Source: Nanfang Daily, Feb. 17, 2015