The growth of foreign direct investment (FDI) in China will maintain its sound pace this year, thanks to the country’s robust economic recovery and moves to upgrade its industries and further expand local demand, experts and business leaders said. Despite the fact that many foreign economies fully resumed production later last year, the completeness of their industrial and supply chains cannot compete with China’s, said Liu Xiangdong, Researcher at the China Center for International Economic Exchanges in Beijing. Due to China’s high vaccination rate and the swift recovery of its manufacturing sector, services sector and foreign trade, the nation has emerged as a safe and lucrative place for global capital, supported by the dual-circulation development paradigm – in which the domestic market is the mainstay and the domestic and foreign markets reinforce each other, Liu said.
After surpassing the United States as the world’s biggest recipient of foreign investment last year, China’s actual use of foreign capital soared 35.4% on a yearly basis to CNY481 billion in the first five months of this year. The volume surged 30.3% from the same period in 2019, data from the Ministry of Commerce (MOFCOM) showed. Meanwhile, foreign investment in the service industry came in at CNY381.9 billion between January and May, up 41.6% year-on-year. Chen Bin, Executive Vice President of the Beijing-based China Machinery Industry Federation, anticipated that China’s attractiveness as a location for FDI will continue to grow in the second half of 2021, as the Covid-19 pandemic has seen a resurgence in export-oriented countries, including India, Vietnam, Malaysia and Thailand, in recent months.
