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China's FDI grew by 20.5% in the first four months this year. How is such double-digit growth possible given the high base from last year? Will such growth sustain in the second quarter?(2022-05-19)

We believe there are three drivers to the steady FDI growth this year. First, China remains an attractive market. Thanks to the concerted efforts of all regions and authorities to balance covid-19 control and economic and social development, the economic fundamentals remain just as solid and sound. Considering the immense market size in China, many FIEs remain optimistic about their prospect in China. The second reason is the effective implementation of opening-up policies. The new version of foreign investment negative list has lifted equity cap requirement for auto making and other industries, helping to attract more FDI to China. In response to the call for an easy business environment from FIEs, departments concerned have introduced a range of policies and measures, including by enabling their equal participation in government procurement and extending the individual income tax exemption for foreign nationals, providing greater predictability and confidence to FIEs. Thirdly, the investment environment continues to improve. In enforcing the Foreign Investment Law and its implementing rules, we have sorted out the inconsistent provisions and pushed for the revision, abolition, and introduction of over 500 legal documentation. The task force for key foreign-invested projects, under the foreign trade and foreign investment coordination mechanism, has played a coordinating role in solving problems for FIEs and pushing for the implementation of key projects. There has been significant progress in building a market-based, law-based and international business environment. China’s comparative advantages, in terms of infrastructure, human resources, and ancillary industries, continue to provide a sound environment for the growth of FIEs.

There are many challenges to the utilization of FDI in China, caused by multiple factors, but many of the favorable conditions for FDI attraction remain unchanged. MOFCOM will continue to act upon the decisions and arrangements of the CPC Central Committee and the State Council, and make every effort, along with other departments and local governments, to stabilize FDI, and provide a better business environment and services to FIEs in China.