By CGTN’s Global Business
There is a worry that US companies may be under pressure to leave the Chinese market, as US President Donald Trump just claimed China as “grand champions” of currency manipulation and several policies with core of “America first” have been published. It seems to be a tough time for China to attract more foreign direct investment (FDI).
However, three experts with different backgrounds told CGTN that China would still have the greatest appeal to foreign investment. Trade protectionism by Trump, oppositely, might bring China a golden time for FDI.
Tony Fang is a senior research fellow at the Center for China and Globalization, and chair professor at Memorial University and University of Toronto. Fang is confident in China’s further appeal for FDI, considering the competitive labor cost, various choices of workforce and low transportation cost in China.
“Between US and China, even considering the productivity adjustment and foreign currency exchange rate, China still enjoys a considerable competitive advantage,” Fang said.
Andy Xie, an independent economist, indicated the investment atmosphere in China is another point. “Compared with Japan or South Korea, China has an open society, and Chinese has high acceptability to international products.”
The return of talents is also conducive to the FDI in China, as more and more young people now prefer to come back for work. Russell Brown, Managing Partner of Lehman Brown, admitted that foreign companies prefer talents with experience abroad, since “lots of returnees understand China and overseas.”
However, problems still exist. Xie marked China’s economic growth rate and overcapacity as the biggest issue for FDI, and pointed out China "did not succeed in high-tech,” particularly after 40 years of development.
“So China should make a choice: economic nationalism or growing fast?” Xie stressed.
And Brown also thinks the investment cost in China has been increasing, of both materials and labor, which might lead to the leaving of foreign companies.
Chinese government is stepping up. The country is trying to find a balance between securing local companies’ market shares and attracting more foreign investments.
Despite all problems, all the experts were optimistic that China would remain as the greatest destination for FDI. “This may be a great time for China to benefit from the global protectionism,” Fang told CGTN.