China economy sees an increase in FDI


China economy sees an increase in FDI

China economy sees an increase in FDI

China economy sees an increase in FDI

As a result of the effective pandemic's containment and the economic measurements supporting businesses in China, foreign direct investment (FDI) is going to increase on a yearly basis. According to the Ministry of Commerce, China’s actual use of foreign capital rose by 18.3% on a yearly basis to 81.87 billion yuan ($11.83 billion) in October.

FDI in China grew by 6.4% year-on-year to 800.68 billion yuan ($115.09 billion) between January and October. In particular, the services sector attracted 625.79 billion yuan of FDI in the first 10 months of 2020, up 16.2% on a yearly basis and accounting for 78.2% of the country's total use of foreign capital. FDI in the high-tech services sector grew by 27.8%.

The increase in FDI can be seen also as a sign of the positive sentiment among European businesses operating in the country. Indeed, the position paper of the European Chamber of Commerce show that 88% of European businesses are not considering shifting investment to other markets. A 62% still consider China within their company’s top three destinations for investments. During the assessment of the position paper,  saw the contribution of  600 European businesses operating in Shanghai.

Foreign Investment Law, shortened negative lists for foreign investment and other supporting regulations, the signing of the Regional Comprehensive Economic Partnership, are boosting FDI flows to China and further reinforce the nation’s industrial and supply chains. Expectation from representatives of international organizations, foreign business councils in China and executives of multinational companies are towards more market and cooperation opportunities, as they call China's commitment to all-around opening-up in its new development blueprint.

China has basically brought the pandemic under control and got its economy back on track, seeing a steady recover. According to data from the country's National Bureau of Statistics, in October, China's value-added industrial output went up 6.9% year-on-year. Whereas retail sales of consumer goods, the main gauge of China's consumption, climbed 4.3% year-on-year.

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