(Economic Observation) Foreign investment is still flowing into Chinese multinational corporations and cast a veto vote on "decoupling" China's economy

  China News Service, Beijing, July 14 (Reporter Li Xiaoyu) Foreign capital is still flowing into China continuously.

Analysts here believe that this means that multinational companies have cast a veto vote for "decoupling" from the Chinese economy.

  According to official data, China's actual use of foreign capital in the first half of this year increased by 28.7% year-on-year, reaching 607.84 billion yuan, a record high in the same period.

Even compared with the same period in 2019, the growth rate was as high as 27.1%, indicating that the absorption of foreign capital increased rapidly, not entirely due to the low base in the same period last year, but the "gold content".

  This is mainly due to the strong economic recovery in China and the increasing scale of the domestic market, making investors profitable.

Recently, the World Bank raised China's economic growth forecast in 2021 from 8.1% to 8.5%, which is among the highest in the world.

  The European Union Chamber of Commerce in China recently released a survey showing that nearly 60% of European companies plan to expand their business in China in 2021, up from 51% last year.

About half of the respondents said that China's profit margins are higher than the global average, compared with 38% last year.

According to the report, "the resilience of the Chinese market has provided European companies with much-needed shelter during the pandemic."

  The complete supply chain of the industrial chain is also a major advantage of China over other countries.

As Ryan Gunnigel, CEO of Kids2, an American manufacturer of toys and baby products, said, the company's products involve sewing, electronics, steel and plastics, "all of which are easy to find in China."

He said that some suppliers and competitors had set up factories in other countries, but due to problems such as difficulty in finding suppliers and high local production costs, they finally moved back to China.

  Previously, there was a view that after taking into account the epidemic, many countries have introduced or are preparing a series of industrial policies aimed at encouraging the return of manufacturing industries and reshaping the supply chain. China's attractiveness to global investors may weaken, or even weaken. Face the risk of being "decoupled".

However, judging from the current data on China's absorption of foreign investment, a large number of multinational companies are more closely "linking" to China, rather than "decoupling".

  Official statistics show that in the first five months of this year, China has newly established 18,497 foreign-invested enterprises, an increase of 48.6% year-on-year and an increase of 12.4% year-on-year.

  However, some analysts reminded that although there is no "immediate worries", China needs to make early preparations for the adjustment of the future global supply chain structure.

  According to the McKinsey Global Institute’s previous forecast, in the next five years, global companies may transfer a quarter of their global products to new countries. More than half of the pharmaceutical and apparel production will be transferred. The total price of goods will be affected. Will be between 2.9 trillion and 4.6 trillion US dollars.

  Wang Yongzhong, a researcher at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, said that as the epidemic is gradually brought under control, the trend of decentralization and regionalization of the global industrial chain may increase.

By then, China will face challenges in attracting foreign investment.

  The official has realized this.

Gao Feng, a spokesperson for the Ministry of Commerce of China, said frankly that the world economic recovery is still uneven, countries are racing to introduce industrial support policies, multinational companies may adjust the layout of the global industrial chain supply chain, and the cross-border flow of people and logistics caused by the epidemic is still not smooth. These are the uncertainties facing China in the use of foreign capital this year, and the situation remains complex and severe.

  He said that in the future, he will continue to expand market access for foreign investment, strengthen key foreign-funded enterprises and project service guarantees, and continuously optimize the business environment.

  The "Fourteenth Five-Year" Business Development Plan issued by China a few days ago also pointed out that the global industrial chain supply chain is facing reshaping, and the trend of regionalization and localization is obvious. In the future, it will further reduce the negative list of foreign investment access and allow more areas. Foreign holdings or sole proprietorships will comprehensively improve foreign investment services.

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