According to the report by Global Business under Economic Voice, the data of the Ministry of Commerce showed that, in the first eight months of 2016, the foreign investment attracted to China kept on increasing, especially in the service industry, which saw an increase accounting for more than 70% of the total.

 

From January to August, 18,538 foreign-invested enterprises were established throughout the whole country, with a year-on-year increase of 10.2%; foreign investment of RMB548.83 billion was attracted to China, up 4.5% year-on-year.

 

European and American countries rank top in terms of increase of investment in China

 

Concerning the source of investment, the total investment of the top 10 countries/regions in terms of investment in China accounted for 94.8% of the foreign investment in actual use of China, and it keeps on an increasing tendency. For example, both the investment from the United States and that from Germany had an increase of about 80%, while that from the UK was nearly doubled. In addition, the investment from the EU, the ASEAN and the countries along “the Belt and Road” also had an increase to some extent.

 

Concerning the investment distribution, there are differences between the central, eastern and western parts of China. Fan Wenjie, deputy director of the Department of Foreign Investment Administration of the Ministry of Commerce, made some explanations:

 

Fan Wenjie: The foreign investment in actual use in western China maintained a fast increase, while that in eastern China showed a stable tendency and that in central China had a decrease, which may be possibly because the impact of the paid-in investment of some big investors.

 

Service industry maintains a stable increase of attracted foreign investment

 

The foreign investment in the service industry maintained a stable increase.

 

Fan Wenjie: From January to August, the service industry attracted foreign investment of RMB387.8 billion, up 10%, accounting for 70.7% of the total foreign investment attracted to China. Big increase was especially seen in the warehousing and post service industry, information transmission industry, computer service industry and software industry.

 

The foreign investment in actual use of the high-tech service industry had an obvious increase, especially that of the IT service industry, which reached 322.7%. Kuang Xianming, director of the Center of Economics of China Institute for Reform and Development, made some explanations:

 

Kuang Xianming: For these years, a very fast increase of FDI (foreign direct investment) in the service industry has been a major characteristic of foreign investment in China. Therefore, the situation this year is not an occasional phenomenon. China has passed through the stage to rely on trade in goods to attract foreign investment and entered a new stage to focus on the development of service trade. In the past few years, the State Council has adopted many measures for the opening-up of the service industry. From a long-term perspective, I believe that the fast increase of foreign investment in the high-tech service industry will greatly benefit the economic transformation and upgrading of China.

 

Expert comments: with continuously optimized structure, China is still a hot land for foreign investment

 

Xu Hongcai, head of the Department of Economic Research of China Center for International Economic Exchanges, believes that it is a good thing to see an increase in both foreign investment attracted to China and overseas investment made by China in the recent two years. Many people have a misunderstanding of the decrease of attracted investment. China is still a hot land for foreign investment.

 

Xu Hongcai: Especially, the performance in the first eight months of this year showed that foreign investment attracted to China has a stable increase, reflecting the good effect of structural optimization. For example, the high-tech service industry saw a big increase of foreign investment, which should be especially due to the enhanced cooperation between the countries along “the Belt and Road” and China in production capacity expansion. It indicates that, “the Belt and Road” initiative has got popular support from the international community. I believe that China will attract more foreign investment in the future.

 

We should make use of foreign investment. It is not just about capitals but also about technology and management experience. On the one hand, we should be more aggressive to go global. On the other hand, we should expand opening-up to attract foreign investment and complement each other's advantages.

 

Source: Translated from Invest Guangzhou, September 18, 2016