SCIO briefing on China's commerce work, operations in H1 2021
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E-mail China.org.cn, July 29, 2021
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Recently, the Ministry of Commerce released the statistics on foreign investment in China from January to June. What are the characteristics of the growth rate of foreign investment in the first half of this year? What did the Ministry of Commerce do to stabilize foreign trade and investment? Thank you.
Zong Changqing:
Thank you for your questions. This year, faced with a complicated and severe environment both at home and abroad, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the Ministry of Commerce worked with other departments and various regions to firmly implement the deployments of the CPC Central Committee and the State Council on stabilizing foreign trade and investment and ensuring stability on the six fronts and security in the six areas. The work of stabilizing foreign investment has been steadily promoted. In the first half of the year, foreign investment in China grew rapidly, which is significantly better than expected and laid a solid foundation for achieving the country's goal of keeping foreign investment stable for the whole year. There are four main characteristics to this:
First, rapid growth. In the first half of this year, actually used FDI in the Chinese mainland surged 28.7% year on year to 607.84 billion yuan, increasing 27.1% from the same period in 2019. Defined in U.S. dollars, FDI jumped 33.9% year on year to 90.96 billion U.S. dollars, increasing 28.6% from the same period in 2019. No matter in yuan or U.S. dollar terms, the FDI's pace of growth in the first half of this year was the highest in almost 10 years, and its scale hit a record high for the same period.
Second, high technology. The actual use of FDI in high-tech industries increased by 39.4% year on year to 192.4 billion yuan, up 39.6% from the same period in 2019, and its proportion hit a record high for the same period. FDI in the high-tech manufacturing sector surged 29.2%. Among these, FDI in computer and office equipment manufacturing and electronics and communication equipment manufacturing increased by 45.4% and 34.2%, respectively. FDI in the high-tech service sector jumped 42.7%. Among these, FDI in the transformation of scientific and technological achievements industry and in the R&D and design service industry increased by 93.2% and 45.8%, respectively.
Third, major foreign-funded projects were increased.
The number of large foreign investment projects with contract values over US$100 million increased 81.3% year on year to reach 602, up 76% compared with the same period in 2019. A number of landmark projects were also launched, including Hyundai Motor Hydrogen Fuel Cell System (Guangzhou), Bosch Hydrogen Powertrain Systems (Chongqing), Bio-pharmaceuticals Facility (Hangzhou) of Thermo Fisher Scientific, and the Legoland Shanghai Resort.
Fourth, foreign investment projects were supported widely across China. Foreign funds in China's eastern, central and western regions increased by 29.7%, 33.6% and 6.1%, respectively. Meanwhile, 20 provinces in China registered double digit growth in foreign investment. Among them, the top six provinces -- Shandong, Zhejiang, Shanghai, Jiangsu, Guangdong and Beijing -- saw growth rates of 61.9%, 36.4%, 35.6%, 26.7%, 20.6% and 13.5%, respectively.
Since the beginning of 2021, the MOFCOM has been mainly focused on the following four aspects:
First, we have stabilized favorable investment policies. We continued to carry out a series of policies on stabilizing foreign investment, particularly the Suggestions on Further Stabilizing Foreign Trade and Investment, which was released last year by the State Council. The MOFCOM also issued the Notice on Effectively Stabilizing Foreign Investment By Centering on Fostering a New Development Paradigm, with 22 supportive measures being launched. We also joined hands with relevant departments to introduce supportive policies to stabilize foreign capital such as by strengthening financial securities and preferential tax policies for imported scientific innovations. A recent survey conducted by the MOFCOM showed that 68.6% of foreign enterprises were very satisfied with foreign policies issued by the central authorities, and 31.4% of them were basically satisfied.
Second, we have broadened the platform. While continuing to support Beijing's creation of an open and comprehensive demonstration zone in service sectors this year, we added the four additional trial sites of Tianjin, Shanghai, Hainan and Chongqing to expand overall services, and carried out 203 experimental measures, forming a new pattern of "1+4" pilot projects which were approved by the State Council. We further enhanced the innovation ability of national-level economic development zones, while another 13 national economic technological development zones were approved by the State Council.
Third, we have invited more foreign funds. We made concerted efforts in attracting foreign capital by integrating investment resources and establishing a joint-action mechanism that is marked by "serving the new development paradigm and supporting the flow of foreign funds into local enterprises." More than 20 major expos were held, including the 12th Central China Investment and Trade Exposition (Expo Central China 2021) and the 27th China Lanzhou Investment and Trade Fair. We also conducted a series of events to promote investment, such as the "China International Import Expo (CIIE) entering Sichuan" and "multinational corporations travelling to western China" to help local enterprises bring in more foreign funds. According to incomplete statistics, in the first half of this year, over 900 commercial events were launched across China, with more than 1,400 new contracts being signed with foreign companies, reaching a total contractual value of more than $170 billion.
Fourth, we have improved services. We have given play to the role of coordinated mechanisms for foreign trade and foreign investment as well as the task forces for key foreign-funded projects. The joint-action mechanism between central departments and local governments has been improved. We held 38 exchange activities focused on key industrial fields such as medicine and integrated circuits, which were joined by foreign enterprises and chambers of commerce, We coordinated efforts to address more than 900 problems raised by foreign enterprises and key foreign-funded projects, such as personnel entry into China, custom checks and vaccinations. We arranged for over 20,000 foreign personnel to come into China and helped businesses resume normal production and operations, thus stabilizing expectations and confidence among foreign investors.
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