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China still attractive to foreign investors amid changes

Updated: Feb 1,2016 7:49 AM     english.gov.cn/Economic Daily

China’s improved investment environment, favorable policy measures, and upgrading industrial structure make it a still attractive place for foreign investment.

Amid downward pressure, rumors of China’s becoming less attractive for foreign investment and large-scale evacuation of foreign companies seem to be popular. But the latest report from the United Nations Conference on Trade and Development proved the rumors to be nonsense.

Foreign direct investment in 2015 reached $136 billion with a 6 percent growth, ranking in the world’s top three, according to the report.

The rumors are basically derived from structural change of foreign investment in China amid downward pressure, reinforced by the US Federal Reserve raising interest rates and devaluation of RMB.

But the UN report reassured the market that China remains a promising place to invest.

In fact, the change in China’s investment environment provides opportunities for foreign investment.

A large-scale cancellation of investment items that used to be limited to foreign companies, a more convenient review process, and China’s efforts to build free trade zones make China’s investment environment more attractive.

Moreover, the Belt and Road Initiative strengthened mutual investment and trade as data indicates that investment from countries related to the initiative rose 25.3 percent last year.

China’s intact industrial chain and supporting ability enable foreign companies to swiftly find a place in the world’s second-largest economy, with the help of upstream and downstream companies in China. China’s ability in this area has no match in the world.

Improved infrastructure, traffic, logistics industry and high-quality human resources also serve as main attractions for foreign investment.

In addition, China’s structural adjustment will provide opportunities to foreign investors, as high-end manufacturing and service industries are using more foreign investment. Data shows that in 2015, China’s high-end manufacturing industry used 58.35 billion yuan ($8.87 billion) in foreign investment, an increase of 9.5 percent year-on-year.

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