FDI rise confirms nation's economic pull

Employees work on the production line of a foreign funded electronics company in Hai'an, Jiangsu province. (Photo by Zhai Huiyong/for China Daily)

Foreign direct investment in China has grown 17 percent year-on-year to 798.33 billion yuan ($117.56 billion) in the first seven months of this year, indicating that the country's ability to attract capital is intact despite challenges threatening the recovery of the global economy, said experts and executives of international companies on Thursday.

Thanks to its highly concentrated supply chains, close global linkages and flourishing domestic market, China has seen its actual use of foreign capital surge, the Ministry of Commerce said.

Although supply chains in the Yangtze River Delta region were disrupted by the COVID-19 pandemic in the second quarter, China remained a growth engine for multinational companies, and the government has vowed to make the nation a place where MNCs can "dare to invest", said Zhang Yongjun, a researcher at the China Center for International Economic Exchanges in Beijing.

FDI inflows into China will be stable this year, and the country's ability to keep consumer prices stable and facilitate the operations of global supply chains will bolster stabilization and recovery of the world economy in the coming years, he said.

FDI inflows into the services sector reached 598.92 billion yuan between January and July, up 10 percent year-on-year. The growth rates for high-tech manufacturing and high-tech services were 33 and 31.8 percent, respectively, said Shu Jueting, a ministry spokeswoman, at a news briefing held online on Thursday.

Ministry data showed investments from South Korea, the United States, Japan and Germany rose sharply during the seven-month period, with the year-on-year growth rates reaching 44.5 percent, 36.3 percent, 26.9 percent and 23.5 percent, respectively.

Bai Ming, deputy director of international market research at the Beijing-based Chinese Academy of International Trade and Economic Cooperation, said these facts show foreign investors' strong willingness to continue to invest big time in China.

"The growing FDI figures in China disprove earlier reports that companies from certain developed countries are withdrawing from China and shifting their investment into their home markets, and other economies such as Vietnam and India," he said, adding that business fields including new energy, consumption, high-end manufacturing and services will remain hot spots for global capital.

Yang Tao, deputy director-general of the comprehensive affairs department of the Ministry of Commerce, reiterated that the fundamentals of China's economy－strong resilience, ample potential, wide room for maneuver and long-term improvement－will not change.

Apart from planning to increase its store numbers from around 3,000 this year to up to 6,000 in 2026 across China, Skechers, a US-based athleisure, shoe and clothing company, will operationalize the second phase of its Taicang logistics center in Jiangsu province in the fourth quarter of 2024, with a total investment of 1.65 billion yuan.

"We are confident about the Chinese market," said Willie Tan, CEO of Skechers China, South Korea and Southeast Asia. The company will continue to strengthen its wide-ranging product layout for all age groups as China has become a cradle of fostering "numerous new consumption scenarios, products and services in the sports and health industry", Tan said.

Intuitive Surgical Inc, another US-based robotic surgical system manufacturer, announced earlier this month that it will invest over 700 million yuan to build a manufacturing and innovation base in Shanghai. The base will help expand access to robot-assisted surgery to more patients in China.

Gary Guthart, CEO of Sunnyvale, a California-based company, said Intuitive's growth in China is in alignment with the government's Healthy China 2030 initiative. The firm's new facilities are expected to be operational in Shanghai in 2025 and will produce the da Vinci XI surgery robots for the Chinese market.