What is the reason why China surpassed the United States to become the world's largest foreign capital inflow country last year?

Why does China attract foreign investment in the world?

　　Guo Yan

　　The "Global Investment Trend Monitoring" report released by the United Nations Conference on Trade and Development in January this year pointed out that China will absorb more foreign investment than the United States in 2020, becoming the world's largest foreign inflow country.

According to data recently released by the Ministry of Commerce, my country's actual use of foreign capital in the first quarter maintained a growth momentum, with a year-on-year increase of 39.9% and a year-on-year increase of 24.8%.

　　With the continuous spread of the new crown pneumonia epidemic, the slow recovery of the world economy, and the apparent lack of confidence in international investors, how did China achieve an increase in foreign investment?

At least three factors are worthy of attention.

　　First of all, from the perspective of short-term factors, China has taken decisive measures to respond to the epidemic and promote the resumption of work and production, so that the Chinese economy is the first to resume growth in the major economies and become a visible "safe haven" and "safe island" for global capital.

　　As early as October last year, Georgieva, President of the International Monetary Fund, said that because different economies have made different policy responses to the epidemic, the global economy will face uneven development prospects.

Practice has shown that epidemic prevention and control is a key factor in economic recovery.

As the saying goes, "If you are not resolute in fighting the epidemic, it is tantamount to resolutely not fighting the epidemic." The lessons of the United States, India and other countries in this regard are no less profound.

Looking at China again, in the face of the sudden epidemic, it resolutely took measures to stop the spread of the epidemic, and insisted on focusing on epidemic prevention and control on the one hand, and resuming work and production on the other, and quickly stabilized its position.

Not only that, China has also completed the task of alleviating poverty, building a moderately prosperous society in all respects, and successfully formulated the "14th Five-Year Plan" and the outline of long-term goals for 2035.

In contrast, China's attractiveness to global capital is naturally extraordinary.

　　Secondly, from the perspective of medium and long-term factors, China's economic policy is stable and its growth potential is huge. Foreign capital is confident in my country's future development, and investment in China continues to grow steadily.

　　In the past few years, although the external environment facing my country's development is complex and severe, and the competition for international investment has intensified, China's overall advantages in attracting foreign investment have not changed.

In particular, China's economy has maintained an overall stable and good momentum of progress, and the huge potential of the domestic market is gradually being released.

　　Judging from the recent foreign direct investment data of the United Nations Conference on Trade and Development, China attracted US$139 billion in foreign investment in 2016 and US$163 billion in 2020, showing a steady upward trend without major fluctuations.

This fully reflects the growing confidence of foreign investors in China's investment, and China's competitiveness in attracting foreign investment is constantly improving.

Surveys by many foreign chambers of commerce in China also show that China is still an important investment destination for foreign investors.

　　Once again, China's pace of opening up to the outside world has never stopped.

In recent years, China's market access has been continuously relaxed, openness has been continuously expanded, and the business environment has been continuously optimized.

For example, the new version of the Catalogue of Industries to Encourage Foreign Investment, which was formally implemented in January this year, has further expanded the scope of encouraging foreign investment.

The "Opinions on Serving the "Six Stability" and "Six Guarantees" recently issued by the General Office of the State Council to further improve the work related to the reform of "decentralization, management and service" put forward to continue to optimize the foreign investment environment.

At the Boao Forum for Asia Annual Conference 2021, many participants praised the continuous improvement and optimization of China's business environment and expressed their full confidence in the Chinese market.

It is believed that as various measures for further expansion and opening up continue to be put in place, China's attraction to foreign investment will also become greater and the advantages of a huge market size will become more apparent.