BEIJING, Feb. 22 (Xinhua) -- China is attracting growing foreign investment in spite of global FDI sluggish. As was shown in the latest Global Investment Trends Monitor released by the United Nations Conference on Trade and Development (UNCTAD), 2018 saw a continuous decline of global FDI which dropped to the lowest level since last global financial meltdown.
However, China’s FDI ramped up against the backdrop, with data by the Ministry of Commerce (MOC) showing an actual use of foreign capital of 885.61 billion yuan in 2018, up 0.9 percent year on year and highlighting China's lasting appeal to overseas investors.
Huge market opportunity
In 2018, China lifted restrictions on the proportion of foreign ownership in ship, aircraft and other major technical equipment sectors while released schedule for full opening-up of auto industry to foreign investors.
On January 7, Tesla broke ground on Shanghai factory, becoming the first foreign auto company approved to establish wholly-owned factory in China. The Shanghai factory is Tesla’s first gigafactory outside the U.S., said Tesla CEO Elon Musk.
The year of 2018 saw fast increase of foreign capital use in China’s hi-tech manufacturing sector. Data shows that actual use of foreign capital in manufacturing sector registered a year-on-year increase of 20.1 percent in the year, accounting for 30.6 percent of the total, 4.8 percentage points higher than that of the previous year. In particular, foreign capital use in hi-tech manufacturing sector rose 35.1 percent on year.
Meanwhile, the development of China’s economy and the subsequent consumption upgrades trigger more and higher demands, thus attracting more foreign investment.
He Fei, a senior research fellow with the Financial Research Center of the Bank of Communications holds that China, a huge market with nearly 1.4 billion consumers, is home to a steadily expanding middle-income group that is globally unparalleled in size and it therefore has enormous market opportunities.
The Chinese market is expanding in size and upgrading in mix. Many multinationals are well-placed to cater to consumer needs for more quality services, such as medicine, finance and education, said He Fei.
In 1985 the first joint venture was founded by Royal Philips in China. So far, around 432,000 sets of Philips medical facilities and software have been installed in some 5,000 hospitals across China. "China is now Philips' second largest market worldwide," said Andy Ho, CEO Greater China, Royal Philips.
Allianz China Life Insurance is the first China-Europe insurance joint venture. Thanks to the strong growth of Chinese insurance market, it realized a year-on-year premium increase of 23 percent last year, multi-fold of average industrial level. According to Chinese accounting standards, Allianz China has been making profit for six consecutive years.
China is contributing more and more to global performance growth of foreign firms that operate in China, said Bai Ming, deputy director of the International Market Research Department of the Chinese Academy of International Trade and Economic Cooperation under the MOC.
Relaxing market access
On January 29 the first branded gas station of BP was unveiled in Shandong, which means this British oil and gas company officially initiated its plan to build another 1,000 gas stations across China in the coming five years.
The latest negative list for foreign investment has lifted restrictions on the number of gas stations funded and operated by foreign capital, and the proportion of foreign share. So we are confident to see the five-year plan through,said a person in charge from BP.
James Zhan (Zhan Xiaoning), Director of Investment and Enterprise at the UNCTAD noted that the lasting appeal of China to foreign investors lies in its continuing policies for further opening-up, such as relaxed access to trade in services and more investment in hi-tech industries.
Global economy is currently confronted with a mix of challenges, such as the rise of trade protectionism. China remains committed to opening up, as evidenced by its large number of opened industries and its efforts to lift restrictions. Besides, we are seeing continuity in China’s opening-up policy, which will beef up foreign investors’ confidence in the Chinese market, said Denis Depoux, CEO of Roland Berger Greater China.
Encouraged by China's relaxation of restrictions on the proportion of foreign share, BMW announced that it would invest another 3 billion euros in China. We are fully confident that China will continue to deepen reform, expand the opening-up scope and maintain a long-term, sustainable economic growth, said Jochen Goller, president and CEO of BMW Group Region China.
Shaping world-class business environment
In 2018, a total of 60,533 foreign-funded firms were newly established in China, up 69.8 percent on year. The surge in foreign-invested enterprises should be attributed to China’s efforts in reducing corporate tax, streamlining administrative examination and approval, and building free trade zones, which collectively ensure a more effective, fairer, and more transparent market environment.
As shown in the Doing Business 2019 newly released by World Bank, China has moved up 32 places compared with the previous year in the ranking of business environment to the 46th performer among 190 economies. China has made remarkable progress by multiple indicators.
"A comprehensive, open, new layout of opening up has been shaped in China, and a world-class business environment has been built. As such, China is now among the world's most attractive investment destinations," said Leon Wang, executive vice-president of International at AstraZeneca PLC.
Thanks to Chinese government’s sustained endeavor in streamlining and accelerating the approval procedure for medicine imports, a number of AstraZeneca's new drugs have been introduced to market via fast approval channel. This made it easier for multinationals to take roots in Chinese market, while provide faster access to world-leading innovative drugs for Chinese patients.
The Chinese market is of great appeal and Chinese government’s efforts in improving business environment are very impressive; so we are optimistic about China's market prospects in 2019, said Anna, president of IKEA Retail China, who is deeply impressed by China’s measures in lowering taxes and dues. She also added, Lower taxes mean lower costs. Thanks to that, we are more capable of product innovation and business expansion. (Edited by Niu Huizhe, niuhuizhe@xinhua.org)
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