Foreign direct investment (FDI) into the Chinese mainland fell by 8.6 percent year on year in the first two months of 2020 as a result of the novel coronavirus outbreak and extended Lunar New Year holidays, a commerce official said Friday.

The FDI totaled 134.4 billion yuan (about 19.2 billion U.S. dollars) for January and February, said Zong Changqing, director of the Foreign Investment Department at the Ministry of Commerce (MOFCOM).

A breakdown of the data showed FDI inflows climbed by 4 percent year on year in January but plunged by 25.6 percent in February, Zong told a press conference.

Foreign investment in high-tech industries increased by 2.2 percent year on year during the period. Also, Shanghai and Guangdong pilot free trade zones saw increases of 13 percent and 12.8 percent, respectively.

Global FDI is expected to undergo the fifth consecutive annual decline this year, according to UNCTAD. China attracted a total of 141.2 billion U.S. dollars in foreign investment last year, accounting for 10.1 percent of the global FDI, up from 6.7 percent in 2015.

Policy package

To stabilize foreign trade and investment, China will give full export rebates to all products in time, except for those that are in the categories of high energy consumption, high pollution and resource-based, said Li Xingqian, director of the Department of Foreign Trade, MOFCOM.

Meanwhile, the country will guide financial institutions to increase credit loans for foreign trade and implement extension policies on repayments of capital and interest.

Commercial insurance companies will be supported in offering short-term export credit insurance services and lowering premium rates.

The negative list on foreign investment will be further shortened and the service sector is expected to be more open to foreign capital, said Zong.

According to data from the MOFCOM, as of Thursday, excepting coronavirus-hit Hubei Province, 60 percent of the key manufacturing foreign-funded enterprises, as well as more than 40 percent of the major foreign companies in the service industry in China have resumed over 70 percent of their production capacity. 

China remains a key market

According to a new survey released on Wednesday by the American Chamber of Commerce in China, some 63 percent of its members are still willing to enlarge investment in China this year, with several companies already stepping up the pace.

Starbucks on Friday announced a plan to build a coffee innovation park in eastern China, the largest manufacturing investment by the world's leading coffee chain outside the United States.

The innovation park, located in Kunshan Economic and Technological Development Zone, Jiangsu Province, will incorporate the entire supply chain, including import and export of coffee beans, roasting, packaging, warehousing, distribution and training.

With an initial investment of 130 million U.S. dollars, the construction of a roasting plant will start in the latter half of this year.

The facility is projected to be put into operation in the summer of 2022 and will provide fresh high-quality coffee for all stores on the Chinese mainland.

"Starbucks has always taken a long-term view in China, and our commitment to the market has never been stronger," said Belinda Wong, Starbucks China chairman and CEO.

"Starbucks has spent the past 20 years sharing its passion for coffee across China," she said, adding that the coffee innovation park will set a blueprint for the future of coffee roasting and supply chain management and further elevate China's coffee industry "while supporting Starbucks' growth in China, with China."

Starbucks has opened more than 4,300 stores on the Chinese mainland, with over 58,000 employees.

Starbucks has actively participated in China's reform and opening up for many years, contributing a lot as well achieving mutual benefits, said Chinese Premier Li Keqiang in his congratulation message.

"The coffee innovation park represents the latest international standards and realizes green production, which is conducive to innovation and modernization of the industrial chain and supply chain," the Premier said.

U.S. retail giant Costco last month also confirmed a plan to open a second store on the Chinese mainland. It will be in Shanghai.

Additionally, Japanese automaker Toyota and FAW Group will co-build a new electric vehicle plant in the north China's Tianjin Municipality, with the total investment hitting around 8.5 billion yuan (1.22 billion U.S. dollars).

(With input from Xinhua)

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