Opinion     

China remains top investment market for MNCs

CE.cn, March 22, 2012

• There are reports recently that foreign-owned enterprises are withdrawing from China. Investigations reveal that it is only an individual case. It is normal to see withdrawal and entry, and withdrawal never becomes a trend. According to the latest statistics from Ministry of Commerce that in January 2012, the investment to China from the Asian region keeps increasing and the investment from the US grows by 29.05 percent year on year with the actual foreign investment up to $342 million. According to the research reports released in 2011 by the AmCham China, EUCCC and JETRO, in the recent two years, a high proportion of enterprises are willing to increase their investment in China. The research by some international organizations also reveals that China is still a premier investment destination for foreign enterprises in the world.

  Due to its comprehensive advantages to attract foreign investment, China has ranked the first among the developing countries and the second in the world for consecutive 19 years in the aspect of foreign investment. In recent years, continued, stable and quick development of China??s economy, continued expansion of the domestic consumption market scale, and increasingly improving of the legal and policy environment constitute the long-term comprehensive advantages to attract foreign investment. According to a research, market has become the first determinant for transnational corporations to invest in China. During the 12th Five-year Plan, the acceleration of industrialization, informatization and urbanization will offer more opportunities for foreign investors.

  Moreover, we are making a great deal of efforts to further expand the opening fields and improve the investment environment. The issuance of the Several Opinions of the State Council on Further Improving the Work on Utilizing Foreign Investment in 2011 by the State Council and the formal execution of the new edition of Catalogue for Guiding Foreign Investment this year also show the new trend that China is further expanding opening and guiding foreign investment to the high-end manufacturing industry, high-tech industries, modern service, new energy, and energy saving and environmental protection industry.

  However, we must be aware that we will meet a severe foreign and domestic situation in absorbing foreign investment. Internationally, the instability and uncertainty of the world economic growth increase, the adjustment of the international industrial structure keeps a slower pace and the growth of total direct investment amount remains weak in the globe. Domestically, there are multiple pressures such as weak external demand, difficulty in financing for some enterprises, serious labor problem in some regions and rise of enterprise operational cost, and there will be much pressure for stabilizing the scale and adjusting the structure of the foreign direct investment.

  The globe economy is wobbled due to the European and US sovereign debt crisis, so the US and even the whole European Union begin to issue policies to encourage backflow of the indigenous enterprises. An analysis shows that some technical- and capital-intensive capacity in some major countries absorbing foreign investment may tend to flow back to the European and US mainland and some processing trade capacity may turn to some countries with low cost such as Vietnam and India. Such a trend of new international division layout is worthy of our attention.

  Under the new situation to introduce foreign investment, we must accelerate transformation of the mode of economic development, make great efforts to advance structural adjustment and optimize and upgrade the industrial structure. At the same time, we must actively promote the reasonable industrial layout among all regions, so that all regions can take what they needs when introducing foreign investment in order to avoid from the adverse impact due to homogeneous competition.

   

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