Aerial photo taken on Dec. 28, 2021 shows the new Tiexi Plant of BMW Brilliance Automotive (BBA) under construction in Shenyang, northeast China's Liaoning Province. (Xinhua/Yang Qing)
BEIJING, July 28 (Xinhua) -- China's foreign direct investment (FDI) has maintained last year's double-digit growth since the beginning of this year, reported the Xinhua-run China Securities Journal.
The sound fundamentals of China's long-term economic growth, the appeal of its super-large market and the continuously optimized business environment are the main reasons why foreign investors keep scaling up investment in the Chinese market.
-- Increasing investment
BMW Group and a number of multinationals are increasing investment in China this year, which demonstrates that foreign-invested enterprises (FIEs) remain confident in the Chinese market and the long-term prospect of operation in China, Shu Jueting, spokesperson of the Ministry of Commerce (MOC), said recently.
Data from the MOC showed that in the first five months of this year, paid-in amount of big foreign-invested projects with over 100 million dollars of contractual value reached 47.68 billion U.S. dollars, up 40.3 percent year on year and accounting for 54.3 percent of the FDI in actual use during the period.
Propelling the accelerated investment in China by FIEs are the country's complete industrial system, super-large market, and the fundamentals of long-term economic growth. According to data from the National Bureau of Statistics, China's gross domestic product (GDP) expanded 2.5 percent year on year in the first half, showing a momentum of stable recovery.
The strong resilience of China's economy and active market demand have strengthened BMW Group's determination to expand investment in China. The group will keep making innovations and take an active part in the high-quality and sustainable development of China's economy, said Jochen Goller, president and CEO of BMW Group Region China.
With positive outlook of long-term development and continuously improved market environment, the Chinese economy continues to attract direct investment and capital inflows for medium- and long-term asset allocation purposes, said Wang Chunying, deputy head of the State Administration of Foreign Exchange, adding that the Chinese economy can bring relatively stable returns to international investors, which gives a boost to their long-term investment in China.
Wang also noted that in addition to the inflow of new investment capital and shareholder loans, many FIEs have reinvested a significant portion of their profits in China. Compared with other major economies, China has seen a relatively higher proportion of FIEs' profits reinvested in the country.
-- Improving business environment
China has adopted a series of measures to stabilize foreign investment, with focus on fostering a market- and law-based and internationalized business environment to fuel multinational companies' development in China.
The MOC will work with local governments and relevant departments to jointly provide a more enabling environment and better services for the development of FIEs in China, according to Qian Keming, vice minister of the MOC.
Although facing challenges brought by the COVID-19 pandemic, Panasonic's sales in China still maintained a double-digit growth. The performance cannot be delivered without the series of policies to stabilize foreign investment and improve business environment, said Zhao Bingdi, vice-president of Panasonic China & Northeast Asia Company.
The Chinese economy is navigating toward high-quality and sustainable development with business environment more in line with international standards, said Wu Chun, managing partner of Boston Consulting Group Greater China, noting that all these are conducive to the development of FIEs in China.
According to the Business Confidence Survey 2022 (BCS) released by the European Union Chamber of Commerce in China in June, European companies operating in China are optimistic about the country's R&D and innovation environment, with 40 percent of them saying that China's R&D and innovation environment is better than the world average.
China's relentless efforts to improve its business environment have boosted FIEs' confidence in the Chinese market and strengthened their determination to expand investment in China, Feng Yaoxiang, spokesperson of the China Council for the Promotion of International Trade (CCPIT) recently told a press conference.
-- Releasing more supportive polices
More measures have been put on the agenda to further stabilize foreign investment. For example, relevant departments are speeding up the revision to the catalogue of industries that encourage foreign investment to encourage foreign investment in broader fields. The authorities are also moving faster to improve mechanisms to serve key foreign trade enterprises and help them make good use of preferential policies of free trade agreements such as the Regional Comprehensive Economic Partnership (RCEP) agreement.
In terms of project promotion, relevant departments are taking stock of large foreign-invested projects worth more than 100 million U.S. dollars and offering supportive services, so as to promote the early implementation, operation and capacity target fulfillment of the projects.
Regarding business environment improvement, the MOC is compiling the foreign investment guide and enhancing policy support for attracting foreign investment in fields such as manufacturing and R&D centers.
With such favorable factors, China's FDI in the second half is expected to achieve steady growth, Zhao Ping, vice-dean of the CCPIT Academy said in an interview with the China Securities Journal. (Edited by Su Dan with Xinhua Silk Road, sudan@xinhua.org)
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