China’s Latest Policies and Efforts Boost Confidence in Investment Opportunities
Experts and business executives are confident that China will remain an attractive investment destination for global companies this year. This optimism stems from China’s recent policy measures aimed at boosting market confidence and reinforcing its position in global industrial, innovation, and capital chains.
Although there has been a slowdown in the growth of foreign direct investment (FDI) utilization during the first four months of 2023 compared to the first quarter, experts believe that China’s proactive measures will continue to attract FDI amidst rising external uncertainties. China’s actual use of FDI grew by 2.2 percent year-on-year to 499.46 billion yuan ($71.4 billion) in the first four months of 2023, according to data from the Ministry of Commerce. In the first quarter of this year, FDI increased by 4.9 percent year-on-year to 408.45 billion yuan.
Recognizing the challenges posed by geoeconomic fragmentation and a gloomy global economic outlook, China has accelerated the release of its market potential and improved channels for communication and coordination between the government and foreign companies. Zhang Fei, deputy director of the Chinese Academy of International Trade and Economic Cooperation’s Institute of Foreign Investment, highlighted the efforts made by China to alleviate pressure. For instance, the National Development and Reform Commission, China’s top economic planner, announced plans to shorten the list of sectors off-limits to foreign investors.
To attract more global capital, China has scheduled over 20 promotional events throughout the year. These events aim to provide foreign investors with a deeper understanding of China’s investment policies, business environment, and emerging market opportunities. Shu Jueting, a spokeswoman for the Ministry of Commerce, emphasized the importance of these initiatives.
Multinational corporations have been quick to seize market opportunities and increase their investments in China. Sang Baichuan, dean of the Institute of International Economy at the University of International Business and Economics in Beijing, noted that these companies have shown particular interest in high-end consumption, manufacturing, healthcare, and green sectors.
The Ministry of Commerce reported significant increases in FDI from various countries. For example, FDI from France surged by 567.3 percent year-on-year during the January-April period, while the United Kingdom witnessed a 323.7 percent increase, Japan saw a 68.1 percent rise, and FDI from South Korea increased by 30.7 percent.
Prominent figures in the business community have also expressed confidence in China’s potential. Chen Yudong, President for China at Robert Bosch GmbH, a German industrial and technology group, highlighted the vast opportunities for global companies in intelligent electrified mobility, smart manufacturing, and carbon neutrality in China. Joerg Wuttke, President of the European Union Chamber of Commerce in China, emphasized the significant role China will continue to play due to the size of its economy and its integration with the global economy.