Foreign direct investment (FDI) has been a major booster for the Chinese economy. Recent data from the Ministry of Commerce shows FDI into the Chinese mainland, in actual use, expanded by 15.8 percent year on year in July, marking the fourth consecutive month of positive FDI growth. Ministry data also showed FDI in China's non-financial sector grew 0.5 percent year on year to 535.65 billion yuan ($77.16 billion) in the first seven months of this year.
The global economy has entered a recession due to the novel coronavirus disease (COVID-19) pandemic. It has prompted many countries to strengthen their already tightened scrutiny of foreign investment. They have imposed restrictions on communication, transportation, and logistics, affecting transnational business activities and international economic cooperation. Responding to these challenges, China has taken steady steps to continue opening up of its economy.
The recent rebound in China's domestic consumer economy has made it a haven for U.S. companies, helping them offset the damage caused by tumbling sales at home and enabling them to capitalize on the economic rebound that has accompanied China's recovery from the virus.
The COVID-19 pandemic will not change China's role as an attractive investment destination due to its flexible and robust economy. The package of measures China has rolled out to encourage and support foreign investment, including trimming the negative list, optimizing the business environment, and strengthening intellectual property protection, will help secure China's role as a magnet for FDI. The Chinese market is large and there is still a great deal of room to grow.
The country will step up efforts to implement new economic policies amid the containment of COVID-19 and will continue to promote a higher level of opening up to the outside world, further improve the business environment, and continue to play its due role in stabilizing the global industrial chain and supply chain.
This is an edited excerpt of an article originally published in People's Daily on August 18
(Print Edition Title: Still Attractive to Global Investors)