Editor's note: The article was first published by Xinhua News on August 22, 2019. It does not necessarily reflect the views of CGTN.

In the context of the escalating economic and trade frictions between China and the United States, are foreign-funded enterprises in China really “leaving China one after another,” as some people in the U.S. have claimed? A recent research by journalists has found that more and more foreign-funded enterprises are increasing their investment in China. In the first seven months this year, the number of newly-established foreign-funded enterprises in China exceeded 24,000, and they are optimistic about the great potential of the Chinese market.

“The immediate short-term challenges will not change our commitment to long-term development in China,” said Syed Jafry, senior vice president of Thermo Fisher Scientific, a U.S. medical device giant. On August 21, he led a delegation of Thermo Fisher executives to visit China and signed an agreement on capital increase with the Suzhou New District in Jiangsu Province. Eight years ago, the company set up the largest monomer factory in China at that time.

Also in Suzhou, Pentair, a U.S. water treatment enterprise, has increased investment in R&D in the Chinese market this year – nearly 16 million U.S. dollars, although it is facing a double increase in import and export tariffs. “We attach great importance to and are optimistic about Chinese market, and our long-term commitment to invest in China will not change,” said Chen Xia, chief financial officer of Pentair Asia Pacific.

In the face of the escalating tariff threat from the U.S. side, it is undeniable that, due to market, cost and other factors, some foreign-funded enterprises at the low end of the industrial chain and domestic manufacturing enterprises are transferring some of their production capacity out of China. However, this industrial gradient transfer of capital to low-cost areas is in line with the rule of business. At the same time, China will do more to introduce high-quality foreign investment, create a more diversified international trade and investment market, and constantly enhance the competitiveness of the Chinese market.

Statistics show that from January to June this year, Jiangsu Province actually utilized 15.25 billion U.S. dollars of foreign capital, ranking first in the country and becoming a microcosm of foreign-funded enterprises “upping the ante” in China. The more than 24,000 newly-established foreign-funded enterprises in China in the first seven months actually utilized over 530 billion yuan, an increase of 7.3 percent over the same period last year. 

In particular, the amount of foreign capital actually utilized by the high-tech service industry increased by 71.1 percent over the same period last year. Against the background of dim prospects of global trade and investment, it is far from easy for China to make a steady increase in the utilization of foreign capital.

The increased foreign investment in China reflects the great potential of the Chinese economy. The sensitive nature of capital decides that it always “vote with its feet” in terms of the markets it flows into. 

In China, for any demand multiplied by a population of nearly 1.4 billion, the potential market size is unprecedented. According to the economic data of the first seven months of 2019, in each hour passing by, the Chinese market creates more than 1,700 jobs, the value of foreign trade exceeds 3.4 billion yuan, and the Chinese people spend nearly 4.5 billion yuan on shopping and catering. In such a big hour, the world heard the surging pulse of the Chinese economy.

The increased foreign investment in China shows that the Chinese market is irreplaceable. Not long ago, foreign media reported that some of the enterprises that have moved out have returned to China for various reasons. 

Over the past 70 years, China has created favorable material and technical conditions, built relatively-sound infrastructure, developed strong industrial supporting capacity, and trained a large number of competitive talent. 

Today, the output of more than 200 kinds of industrial products in China ranks first in the world. China has 900 million workers, more than 800 million internet users and the largest middle-income group in the world. All this suggests that China is one of the most attractive investment destinations in the world.

The increased foreign investment in China shows the country's determination to accelerate its reform and opening-up. According to a World Bank report, the global ranking of China’s business environment rose 32 places last year. 

In the first half of this year, China further cut taxes and fees by a total of 1.17 trillion yuan, made great progress in streamlining administration, enacted a law on foreign investment, slimmed the negative list for foreign investment access, and introduced “new 11 articles” for the opening-up of the financial industry to foreign investment, launched the Science and Technology Innovation Board, and officially expanded the China (Shanghai) Pilot Free Trade Zone, to name a few only. 

A number of pragmatic measures have been rolled out to improve the business environment, which has strengthened the confidence of foreign investors in China. Today, about 490 of the world’s Fortune 500 companies have invested in China, accounting for 98 percent of the total.

“No enterprise is willing to give up a billion-dollar-worth market!” This is what the journalists heard most from many foreign enterprises in doing the research, including BMW. 

Moving forward, China will, as always, deepen reform and opening-up, strive to create a more stable, fairer, more transparent and predictable investment environment, and attract more foreign investors to share the opportunities in China.

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