China’s Ministry of Commerce (MOFCOM) has said fluctuations in foreign direct investment (FDI) data are a normal part of market behavior, after China posted a decline in FDI for the first eight months of the year. The sluggish global economic recovery and a high base effect were behind the drop, the ministry said.
FDI into China in the first eight months reached 847.17 billion yuan ($116.43 billion), down 5.1 percent year-on-year, data from MOFCOM showed, noting that it will continue to implement measures to attract foreign investment in the remaining months of this year.
During the same period, the number of foreign companies newly setting up businesses in China saw a surge of 33 percent year-on-year to 33,154, according to MOFCOM.
FDI from the UK, Canada, and France shot up by 132.6 percent, 111.2 percent and 105.6 percent from the same period last year. FDI from Switzerland, the Netherlands, and Germany increased by 59.2 percent, 25.3 percent and 20.8 percent.
The actualized FDI in manufacturing totaled 239.95 billion yuan, an annual increase of 6.8 percent. FDI in the high-tech industry surged 19.7 percent, MOFCOM data showed on Friday.
MOFCOM said it will continue to ease market access, further optimize the business environment, and further increase the volume and quality of FDI. In August, a total of 24 measures were issued to boost foreign investment. The main reasons for the decline in January-August FDI are the sluggish global economic recovery and a high base effect, as 2022 FDI reached a record high of 1.2 trillion yuan.
According to an OECD report, global FDI in the first quarter of 2023 dropped by 25 percent.
“FDI is market-oriented, and phased fluctuation is normal. We should look at both the scale and structure of FDI, and hold a balanced view on the near-term and long-term,” a MOFCOM official said, adding that the high growth rate of high-tech sector FDI and the number of newly set up foreign firms show the confidence held by foreign companies in operating in China.
MOFCOM said it will implement policies to attract foreign investment, further deepen its exchange channels with foreign companies and improve the business climate.
(Global Times)
