Foreign direct investment (FDI) into the Chinese mainland, in terms of actual use, rose 37.9% year-on-year to CNY243.7 billion in the first two months of 2022, versus a 14.9% growth last year, the Ministry of Commerce (MOFCOM) said. That amounts to USD37.86 billion in U.S. dollar terms, up 45.2% year-on-year. Actual use of FDI in the services sector totaled CNY175.7 billion, up 24% year-on-year. Investment in high-tech industries grew 73.8% year-on-year. Despite rising external uncertainties, multinationals plan to expand their footprint and investment in China, given its robust development prospects and continuous steps in opening-up, global business leaders said.
Digital transformation, carbon neutrality and common prosperity are among the top areas that are providing the greatest opportunities for multinationals, they said in a recent series of interviews with China Daily. Qualcomm China Chairman Frank Meng said, “Like many domestic and foreign companies that have benefited from the continuously improving business environment in China, we are upping our investments, expanding our presence and seeing a growing list of partners in the country”. According to Meng, Qualcomm will work with its partners to make technology more accessible and accelerate the 5G-powered digital economy, embracing the opportunities offered in China by digital transformation.
Despite uncertainties, such as the potential risks of decoupling and the U.S. Federal Reserve’s looming tightening measures, U.S. engine manufacturer Cummins will continue to invest in expanding its operations in China, said Nathan Stoner, Vice President of Cummins and Chairman of Cummins China. “China continues to be the world’s largest end-market of engines by volume, a critical link in our global supply chain, and one of the fastest developing markets for new energy and hydrogen,” Stoner said, adding that Cummins will open its USD150 million research and development (R&D) center in Wuhan, Hubei province, in the second quarter.
Underpinning business leaders’ confidence has been China’s reiteration of a high-quality development agenda. The Government Work Report at the recently concluded annual session of the National People’s Congress (NPC) promised measures to promote the research and application of low-carbon technologies, improve the income distribution system, and boost technological innovation as well as digital industries this year. “Innovation, decarbonization and common prosperity rank high on China’s agenda, and we anticipate China’s high-quality development will drive future global economic growth over the coming decades,” said Jerry Zhang, Executive Vice Chairman and CEO of Standard Chartered China. The Government Work Report also highlighted the country’s continuous drive in terms of opening-up, and pledged to ensure equal treatment for foreign enterprises, encourage them to enter a broader range of sectors and launch more trials for opening the services sector. To further boost foreign businesses’ confidence in the Chinese market, it is critical for local governments to follow the principle of national treatment, or treating foreign and domestic enterprises in the same way, said David Blair, Vice President at the Center for China and Globalization, the China Daily reports.