With China surpassing the US to become the largest recipient of foreign direct investment (FDI) in 2020, an official at China’s commerce ministry (MOFCOM) credited advantages in the country’s system, which helped deliver a fast economic recovery and further opening-up measures amid the coronavirus pandemic. The official also stressed that foreign capital’s attraction to China won’t change.
Responding to the Global Times at Friday’s press conference, Zong Changqing, director of the Department of Foreign Investment Administration at MOFCOM said such an achievement was unexpected but consequent due to internal and external factors both playing an effect.
FDI into the Chinese mainland in 2020 increased 6.2 percent year-on-year to reach a record high of 999.98 billion yuan ($154.7 billion), up 6.2 percent year-on-year, statistics by MOFCOM showed.
“Facing the pandemic, the Chinese system’s advantages have been demonstrated, as they have safeguarded foreign trade and FDI,” Zong said, adding that this helped the country buck the global downward trend.
China’s fast economic recovery and further opening-up measures have also led to an increase of FDI, the official noted.
“While some countries raised the threshold of foreign investment requirements for market access, China has continued to shorten its negative lists and create more investment opportunities for foreign companies,” Zong said.
With global FDI plunging by 42 percent in 2020 to an estimated $859 billion amid a raging global pandemic, China climbed to the No.1 ranking globally in terms of attracting FDI, according to the UN’s latest report on global investment. Doing so meant that the US was knocked off top spot, despite attracting $134 billion.
However, Zong pointed out the rank is not permanent and there is still space for China to improve its business climate. “What won’t change is foreign capital’s attraction to China due to our country’s super large market,” Zong reaffirmed.
In particular, a growing number of foreign companies are interested in investing in China’s high-tech industries. The utilization rate of FDI in the manufacturing of medicine, aerospace equipment, and computer and office equipment rose 14.1 percent, 44.5 percent and 60.6 percent, respectively, in 2020 year-on-year, MOFCOM noted.
The number of major foreign investment projects over $100 million had now reached 938 in China. Big names such as BMW, Daimler, Siemens, LG and BASF have all expanded their investments in China, according to the ministry.