China remains 'paradise' and 'high ground' for foreign investment

Editor's note: Professor Yang Hangjun is vice dean of the School of International Trade and Economics, UIBE. The article reflects the author's opinions and not necessarily the views of CGTN.

In view of the world landscape today, China is drawing the attention of global investors with its unique charm and strong comprehensive strength. 

At the recently concluded Two Sessions, the government work report clearly pointed out a series of policy directions aimed at attracting foreign investment. This not only demonstrates China's role as a staunch supporter and promoter of economic globalization but also shows that China remains a "paradise" for global investment. 

Currently, amidst the complicated and ever-changing international situation, the global economy faces daunting challenges, and volatility in cross-border investment continues to intensify. Some foreign media have taken the opportunity to hype up "foreign capital withdrawal" and "deterioration of business environment" in China, attempting to belittle the Chinese economy and undermine investors' confidence. However, facts make these assertions appear feeble.

In 2023, China attracted foreign investment of over a trillion yuan, standing at the third-highest level in history. Throughout the year, 53,766 new foreign-invested enterprises were established, marking a year-on-year increase of 39.7 percent. The growth in newly established foreign-invested enterprises reflects the confidence of the global industry and business community in China's future development. 

In terms of the structure of foreign investment, the proportion of investment in high-tech industries reached 37.4 percent, up by 1.3 percentage points from the previous year, while the proportion of investment in the manufacturing sector also rose to 27.9 percent, up by 1.6 percentage points. 

Despite the effect of the pandemic and internal and external factors such as restrictions on China-related investment imposed by some countries, which made China's actual use of foreign capital decrease by 8 percent year on year last year, data as of early 2024 shows that China is gradually emerging from the downturn with significant marginal improvements. In January this year, the actual use of foreign capital grew by 20.4 percent month on month, with the actual use of foreign capital in high-tech manufacturing surging by 40.6 percent, accounting for 34.7 percent of the total actual use of foreign capital.

To consolidate the foundation for the promising recovery momentum of foreign investment attraction and further implement the spirit of the Two Sessions, the Chinese government has recently released a series of policies around expanding market access, intensifying policy efforts, and optimizing a fair competition environment. Since the promulgation of the Opinions on Further Optimizing the Foreign Investment Environment and Strengthening the Foreign Investment Attraction (referred to as the "24 Measures to Attract Foreign Investment") last year, relevant departments have confirmed that over 60 percent of the policy measures have been implemented or have made good progress. 

These measures have gained wide acclaim from foreign-invested enterprises. In addition, on March 19, the State Council promulgated the Action Plan to Steadily Promote High-level Opening up and Make Greater Efforts to Attract and Utilize Foreign Investment, which aims to address many pain points and difficulties in the current process of attracting foreign investment with targeted measures. Specifically, the government has taken a series of measures to expand market access, including issuing a negative list for cross-border service trade, preparing to release a new version of the negative list for foreign investment access, continuing to reduce restrictions on foreign investment, and conducting access trials in such fields as medical care, value-added telecommunications, banking and insurance, and bond funds. 

In terms of strengthening policy efforts, the government has expanded the Catalogue of Industries Encouraged for Foreign Investment and bolstered support for advanced manufacturing and other fields. As for optimizing the business environment, the government will issue review rules of fair competition in bidding and tendering so as to address issues such as local protectionism and ownership discrimination. In addition, regarding the digital economy, the government has issued the Regulations on Promoting and Regulating Cross-border Data Flows to ensure data security and promote orderly and lawful free flow of data. This series of combined policies demonstrates China's resolute determination to expand its opening up and attract foreign investment.

Looking ahead, with the sustained recovery of China's economy and further opening-up, China will continue to maintain strong appeal to global investors. At the same time, we look forward to more foreign-invested enterprises seizing this development opportunity and joining hands with China to build a human community with a shared future.