The investment environment is not deteriorating and is improving – Opinion



Beijing skyline. [Photo/VCG]

Some Western media and politicians spread rumors about the “deterioration of China’s investment environment” and “investment risks” in the Chinese market, and that China’s focus on national security will “deter” foreign investment. claims that it is possible.

Such despicable attempts to taint China’s investment environment and downplay China’s economic prospects are aimed at attracting investment from China, promoting “reshoring” of manufacturing, and promoting “risk aversion.” This appears to be part of a campaign orchestrated by Western countries led by the United States. Strategies by influencing public opinion and waging psychological warfare.

In fact, China’s investment environment is quite the opposite. In recent years, China has taken concerted steps to improve the business environment for overseas investment and promote institutional openness. Measures such as the shortening of the negative list have made it easier for foreign companies to access the Chinese market.

The authorities have shortened the negative list for foreign investment seven times since 2013, removing all items related to manufacturing and further opening up the service sector. The number of items included in the foreign investment negative list has been reduced from 48 items in 2018 to 31 items now. Additionally, regarding free trade zones, the number of items on the negative list for foreign investment has been reduced from the original 190 items to 27 items.

China’s State Council recently released the “Opinions on Further Optimizing the Foreign Investment Business Environment and Further Attracting Foreign Investment.” This opinion consists of 24 policy measures aimed at improving the utilization of foreign direct investment and extending national treatment to foreign investors. Better protect FDI from six different aspects.

This measure not only demonstrates the authorities’ commitment to improving the business environment for foreign investment and promoting a high level of opening-up, but also increases the confidence of multinational companies in the Chinese market and makes China an ideal investment market. It is also useful for projecting as a person.

Indeed, as the Chinese government continues to expand its strategic initiatives, expand institutional opening up, and intensify its “reshoring” efforts amidst the global economic downturn and geopolitical uncertainty; China is steadily attracting FDI and maintaining a healthy growth rate. By a manufacturing company based in the US and her EU.

From 2022 onwards, China will maintain its leading position in terms of both the scale and growth of inward direct investment. In the first three quarters of this year, China attracted 919.97 billion yuan ($125.9 billion) in FDI, with 37,814 new foreign companies setting up operations in the country, according to data from the Ministry of Commerce. This is an increase of 32.4%. Compared to the previous year.

“Innovation with China” has become an important strategy for some multinational companies to gain competitiveness in the market. Many multinational companies have adopted development strategies such as “in China, for China” and “in China, for the world”, which initially imported products, but now they are manufacturing locally. Some companies have also shifted to exporting their products overseas. After localizing its value chain, it leveraged the Chinese market to expand globally.

According to fDi Market data, the share of high-tech manufacturing in total manufacturing FDI increased from $9.89 billion in 2017 to $12.06 billion in 2021, or from 29.5% to 35.8%. Additionally, industries in the high-tech manufacturing sector, such as electronics equipment and general equipment manufacturing, have significantly improved their use of FDI.

In the first three quarters, actual FDI in high-tech manufacturing increased by 12.8%, with medical equipment and equipment manufacturing and electronic and communication equipment manufacturing increasing by 37.1% and 21.5%, respectively.

Due to the large size and potential of China’s service sector market, foreign companies are interested in investing and establishing service provision businesses there. No wonder the services sector currently attracts the highest proportion of FDI.

However, compared with markets in developed countries, China’s services market still has room for improvement, especially in terms of openness in areas such as finance, telecommunications, digital services, culture, education, and healthcare.

China also does not have a unified negative list for trade in services at the national level. Indeed, China has established a negative list management system in areas such as cross-border supply. However, some limitations still exist in areas such as the movement of natural persons. Therefore, China needs to focus on improving transparency in the service sector.

Over the past 40 years, China’s opening-up approach has been characterized by policy-driven opening-up, but it has now shifted to institutional opening-up, the main characteristics of which are the establishment of an open, transparent, stable and predictable state system. It is established. system. This change is expected to have a lasting impact on the confidence of domestic and foreign market participants, including foreign investors, and promote the long-term development of the Chinese market.

As for talk of a “deteriorating investment environment” and “investment risks” in China, they are likely to fade as China continues to open up further to FDI.

The author is deputy director of the US-Europe Research Institute at the China Center for International Economic Exchange.

The views do not necessarily reflect those of China Daily.

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