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China FDI hits $103B in nine months

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A container vessel is loaded at Zhoushan Port, Zhejiang province. CHINA DAILY

China FDI hits $103B in nine months

Foreign direct investment (FDI) in China reached $103 billion in the first nine months of this year, up 2.5 per cent year-on-year, the UN Conference on Trade and Development said in late October.

Foreign investment inflows to China were down by just four per cent, even with the epidemic.

Foreign portfolio managers are moving funds to Chinese markets because Chinese growth rates are higher than elsewhere and because China’s steady monetary policy is creating higher returns than can be obtained in other markets.

China’s 14th Five-Year Plan (2021-2025) will encourage foreign companies and investors to double down on their commitment to the Chinese economy, according to a communique released after the Fifth Plenary Session of the 19th Central Committee of the Communist Party of China.

Significant progress will be made in the reforms of the property rights system and the market-based allocation of factors of production so that market entities will show more vitality.

Fair competition within the market system will be further improved. Basically, China will form the new institutions necessary for a higher-level open economy during the plan period.

Thanks to deepening of opening-up and business environment improvement, China continues to attract higher levels of FDI.

There was over $400 billion of new foreign investment from 2017 to last year, with FDI inflows ranking second in the world for three consecutive years, despite the ongoing trade frictions.

China’s performance has strengthened the confidence of foreign multinational corporations in the Chinese market. MNCs such as General Electric, Fujifilm, Schneider Electric, Schindler Group, and Air Liquide Group swear by their expansion plans in China, despite the Covid-19 impact on the economy.

The 2020 Global Enterprises Report: MNC New Development in China, published by the Centre for China and Globalisation in September, listed top 25 foreign investments this year in China covering the automotive, energy, chemical and high-tech industries. The report stresses that both policy and market factors are important to foreign investors.

China Daily/ASIA NEWS NETWORK

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