Foreign direct investment (FDI) up 6.2% in 2020
January 26, 2021 Category Foreign investment, Weekly
China’s foreign direct investment (FDI) increased by 6.2% year-on-year in 2020 to reach a record high of CNY999.98 billion, according to China’s Ministry of Commerce (MOFCOM). China overtook the U.S. and regained the title of the world’s top destination for FDI, thanks to its effective anti-epidemic measures that allowed factories to restart while production in the rest of the world was still affected by the Covid-19 pandemic. China’s actual use of FDI rose in total amount, range of growth and world share. FDI from the top 15 countries and regions surged 6.4% year-on-year, taking up 98% of the FDI inflow. Investments from the Netherlands and the UK led, with increases of 47.6% and 30.7%, respectively. Investment from ASEAN in China was up 0.7%. More FDI went into the services and high-technology sectors. The actual use of FDI in the services industries grew 13.9%, while that of high-tech industries rose 11.4%, according to MOFCOM. In U.S. dollar terms, foreign capital inflow went up by 4.5% year-on-year to USD144.37 billion last year.
Globally, FDI flows are likely to have decreased by 30% to 40% year-on-year in 2020, according to a report by UNCTAD. In 2019, the U.S. was the largest recipient of FDI, attracting USD251 billion, followed by China with USD140 billion. “The huge FDI flows to China are in stark contrast to other major economies such as the U.S. and Europe last year, after investment fled abroad due to uncertainties over production and coronavirus control,” Cong Yi, Professor at the Tianjin University of Finance and Economics, told the Global Times. In 2020, China was the only major economy to expand, with a GDP growth rate of 2.3%. Consumer spending represented 54.3% of total economic output, marking a new high.
Asgar Rangoonwala, Chairman of the Pharmaceutical Association Committee of the China Association of Enterprises with Foreign Investment, said the Committee’s 42 multinational members are very optimistic about the potential and future development of the healthcare market in China and will step up investments. Italian tire maker Pirelli plans to invest more in tires with technical features such as noise-cancellation, run-flat and seal-inside functions that are suitable for new energy vehicles (NEVs). Zhou Hong, CEO of Roche Pharma China, said China is advancing higher-standard opening-up, stabilizing foreign investment and pursuing higher-quality development, and the company will invest more in China as it feels fully confident in its future. Rogier Janssens, Managing Director and General Manager of the healthcare arm of Merck China, said with China’s further opening up, foreign enterprises gain more benefits in terms of market access and intellectual property protection. The ever-improving business environment will enable foreign companies to better operate their businesses, Janssens said, as reported by the China Daily. Overall, global FDI had collapsed in 2020, falling by 42% to an estimated USD859 billion, from USD1.5 trillion in 2019, according to UNCTAD’s Investment Trends Monitor.
- KURT VANDEPUTTE (UMICORE) APPOINTED CHAIRMAN OF THE BOARD OF THE FLANDERS-CHINA CHAMBER OF COMMERCE (FCCC)
- Webinar: “Knowing Your Chinese Partner” – May 26, 2021, 10 am – 12 am
- EMA starts rolling review of CoronaVac, WHO approves Sinopharm vaccine for emergency use
- The Global Times warns not to politicize the Comprehensive Agreement on Investment (CAI)
- Hainan to become biggest duty-free market in the world