(Economic Observation) Why has the inflow of foreign capital accelerated into China after the epidemic?

  China News Agency, Beijing, January 20 (Reporter Li Xiaoyu) After the world's leading trade growth rate, China's attraction of foreign investment has also brought people a series of "unexpected".

  According to the latest official data released on the 20th, China’s actual use of foreign capital in 2020 reached a record high of 999.98 billion yuan; the year-on-year growth rate was as high as 6.2%, which was higher than the level in 2019. The epidemic has led to sharp global cross-border direct investment. It is even more rare in the context of reduction.

  In the words of Zong Changqing, Director of the Foreign Investment Department of China's Ministry of Commerce, China has achieved "three increases" in the total amount of foreign investment, growth rate, and global share in attracting foreign investment.

  While the quantity is increasing steadily, the quality of China's foreign investment is also improving.

Foreign capital is accelerating the flow of high-tech service industries that represent the future development direction, such as R&D and design services, technological achievements transformation services, e-commerce services, etc. This will not only promote the better development of China’s manufacturing industry and the transformation and upgrading of industrial structure, but also benefit Improve people's living standards; the distribution of foreign investment in regions is more balanced, and the relatively underdeveloped central and western regions and northeast regions have begun to become new "hot spots" for investors.

  From the beginning of the outbreak of the epidemic, it shrank by more than 10% to increase by 6.2% throughout the year. It is no accident that China has attracted foreign investment to achieve a "counterattack."

  China took the lead in containing the epidemic, resuming work and production, and the progress of economic recovery has been outstanding. It became the only major economy that achieved positive growth when the epidemic caused a major recession in the world economy for decades, and became an ideal choice for multinational companies.

  According to a recent survey conducted by the Ministry of Commerce, nearly 60% of foreign-funded enterprises in China have achieved growth or flat in their operating income and profits in 2020, and more than 90% of enterprises are optimistic or cautiously optimistic about their future prospects.

  "We have full confidence in China's economy, market sustainability, and high-potential development. This confidence has been strengthened during the epidemic." ZF Group Management Board Chairman and CEO Walhan Ning Shi Ed said.

  In addition, when many countries have introduced trade and investment protection policies, China has insisted on expanding opening up, improving the business environment, and providing assistance for foreign companies to resume work and production, which has also strengthened their confidence in investing in China.

  At present, China’s national version of the negative list of foreign investment access has been shortened to 33, and the pilot free trade zone has been shortened to 30; the catalog of industries encouraging foreign investment is constantly increasing. The new version in 2020 has an increase of 127 compared with the previous version.

One decrease and one increase make investment in China more free and convenient for foreign companies.

  "We have enjoyed the same treatment as Chinese companies, which has strengthened our confidence in continuing to invest in China." Chen Jiayuan, chief executive officer of Louis Dreyfus North Asia, told a reporter from China News Agency.

  Xiang Weiming, President and CEO of General Electric (GE) China, also stated that the Chinese government has specifically helped foreign companies including GE to solve practical problems encountered in investment, production, and operation, which greatly reduced the impact of the epidemic on GE. The impact of business in China.

As early as early March last year, all GE factories and offices in China, including Wuhan, resumed normal operations.

  Looking forward to 2021, China's attractiveness to global investors is expected to increase further.

  After China's GDP increased by 2.3% year-on-year in 2020, many economists have recently predicted that the performance of major economies will continue to diverge this year, and China's economic growth rate is expected to reach more than 8%.

  Last year, China's consumer goods imports accounted for more than 10% of imports.

Constructing a new development pattern of "dual cycles" will make China's domestic market grow stronger, and this will lay a solid foundation for China to absorb foreign investment growth.

  Wei Jianguo, former vice minister of the Ministry of Commerce of China, said in an interview with a reporter from China News Agency that after the epidemic, China's huge market, complete and stable industrial supply chain, and strong economic resilience have fully highlighted its competitive advantages, and its strength and influence have also been amplified in the epidemic.

Therefore, China's high growth in attracting foreign investment is not a short-term phenomenon, but a long-term trend.