The Ministry of Commerce (MOFCOM) announced that China’s actual use of foreign capital reached CNY672.19 billion (USD103.71 billion) in the first seven months of the year, surging by 25.5% year-on-year, and 26.1% from the same period in 2019. FDI in the services sector grew by 29.2% year-on-year to CNY535.57 billion, accounting for about 80% of the total. FDI from the countries participating in the Belt and Road Initiative (BRI) and member countries of the Association of Southeast Asian Nations (ASEAN) both grew by 46.3% year-on-year. “The sources of FDI inflows into China are becoming increasingly diversified, as the nation steps up efforts to further open up to the rest of the world and pays more attention to regional cooperation,” said Zhang Fei, Associate Director of the Institute of Foreign Investment under the Chinese Academy of International Trade and Economic Cooperation. China’s economic and trade cooperation with other BRI economies and the ASEAN markets is thriving, which will make the two groups the main sources of FDI inflows for China in the future, she said. New services models and business formats emerged since the Covid-19 outbreak, and online and online-to-offline services helped expand the services market, thereby attracting more foreign capital, she added.
Nie Pingxiang, Deputy Director of the Service Trade Institute under the Ministry of Commerce (MOFCOM), said the services sector has attracted more FDI because it is a major driver of China’s economic growth at a time when the structure of the Chinese economy is being optimized. “As China pursues high-quality development and promotes industrial upgrade and transformation, foreign investors will find more business opportunities in the services sector, especially in high-tech services,” he said. Zhang of the IFI said reform and opening-up in the services sector, especially in producer services, have helped attract more FDI. Pilot programs for higher-level opening-up in the services sector were launched in free trade zones and comprehensive demonstration zones, which prove to be effective in attracting more FDI, the China Daily reports.
