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China Economic Net :(Sang Baichuan) Improving Business Environment and Stabilizing Foreign Investment Expectations

作者:IIE  来源:本站  发布日期:2020-10-25

  

  The Ministry of Commerce recently announced the absorption and utilization of foreign investment in the first half of the year. The data show that in the second quarter, the actual foreign investment in China increased by 8.4% year on year, a significant correction from the decline of 10.8% in the first quarter, and the confidence of foreign investment is stable. Experts points out that in the second half of the year, the world economic situation remains grim and complex, and there are still many uncertainties affecting foreign investment. However, the prospects for attracting foreign investment are relatively bright. Foreign investors are optimistic about the safety of their investment in China, about the effect of improving China's investment and business environment, and about the positive changes brought about by the policy of "stabilizing foreign investment".

  Effective response to the epidemic is the premise of "stabilizing foreign investment"

  The COVID-19 pandemic has brought severe shocks and challenges to the global economy. China has made scientific arrangements for epidemic prevention and control, coordinated efforts to combat the epidemic and promote economic and social development. After the resumption of work and production, China's actual utilization of foreign investment has improved significantly.

  Sang Baichuan, dean of the Institute of International Economics at the University of International Business and Economics, pointed out that the impact of the epidemic on China's utilization of foreign investment can be divided into two stages so far. In the first stage, after the outbreak of the epidemic, some foreign investors, considering the safety of their investment, became suspicious of their investment in China, and the new foreign investment significantly decreased. Foreign direct investment in China fell by more than 10% in the first quarter. In the second stage, after China took the lead in preventing and controlling the epidemic and resuming its work and production, the epidemic is still spreading around the world. The foreign investment that China had previously considered leaving has stabilized, the new foreign investment has increased significantly, and the expectation and confidence of foreign investment have improved significantly.

  "China's absorption of foreign investment was most affected in the early stages of the COVID-19 outbreak, before it spread globally. Accordingly, individual foreign capital appears disinvest intention, but the proportion is very low. With the spread of coVID-19 around the world, China's investment environment is relatively stable, so foreign investment has gradually settled down. This is also due to the efforts of relevant departments in China." Zhao Beiwen, deputy director of the Institute of World Economics at the Shanghai Academy of Social Sciences, said that in general, the epidemic has little impact on China's absorption of foreign investment, because foreign direct investment itself has a "sunk cost", and it is impossible to withdraw funds as soon as there is a whiff of wind. Capital liquidity is relatively stable.

  More attention is paid to the safety of industrial chain and supply chain

  Since the second quarter, the actual use of foreign investment in China has grown rapidly, and the confidence of foreign investment has become stable. Experts said that factors such as the continuous improvement of the business environment and notable achievements in epidemic prevention and fighting have played an important role in stabilizing foreign investment expectations.

  Sang Baichuan believes that China has made continuous efforts to improve the business environment for foreign investment in recent years. The foreign investment Law and its implementation regulations have significantly improved the legal environment for foreign investment. At the same time, the scope of market access and business scope of foreign investment have been continuously expanded, and the process of marketization of the business environment for foreign investment has been accelerated, which has also created a strong attraction for foreign investment. In addition, significant progress has been made in benchmarking advanced international standards and internationalization of the investment and business environment. As the law-based, market-oriented and internationalized business environment continues to improve, many multinational companies believe that China is one of the most attractive investment places in the world.

  The outbreak of the epidemic has temporarily disrupted the global industrial and supply chains. Economic globalization has been impacted and supply chains are adjusting at an accelerating pace. Experts believe that some fine-tuning may take place in the industrial and supply chain layout of multinational companies in China, but it will not affect China's position in the global industrial and supply chain.

  "China's position in the global industrial chain and supply chain is the result of its objective conditions, such as industrial categories, technical basis, human resources and other factors of production resources, which are combined with the long-term global investment layout of transnational corporations and finally form a relatively stable result. This will not be changed by the will of some countries.”Zhang Fei said.

  However, it should also be noted that the epidemic has changed the perception of multinational companies and governments on the global industrial chain and supply chain. Zhang said that before the epidemic, multinational companies gave priority to economic benefits and production efficiency in their global investment layout. After the epidemic, more attention will be paid to the safety of industrial and supply chains, that is, the global layout will shrink to the regional layout, and the investment layout of industrial and supply chains will be implemented in a shorter distance around the target market. But this will not affect China's position in the global industrial chain and supply chain.

  "China's huge market demand will play an increasingly important role in the world's supply and demand relations as global supply chains become more diversified." Qu Jian, vice President of China (Shenzhen) Comprehensive Development Research Institute.

  We also need to work both internally and externally to stabilize foreign investment

  Zhang Fei analysis that from the first half of the actual absorption of foreign investment in China, the overall effect is better than expected, but China's "stabilizing foreign investment" is still facing severe challenges, the need from both internal and external efforts to continue.

  First, from the external perspective, China should continue to work with other countries to do a good job in multilateral cooperation in combating the global epidemic, so as to create better external conditions for China to absorb foreign investment. Second, we should focus on all domestic work. In addition to adhering to previous policies and measures to stabilize foreign investment, we should, on the basis of preventing the resurgence of the epidemic, in particular, consolidate the momentum of China's economic development and recovery of consumption, and create external conditions for the recovery of foreign investment in China.

  "As long as China creates a safe production and business environment for foreign investment, a huge market with consumption capacity and potential, and a more open and fair competition market environment, China's 'stable foreign investment' will come into being." Zhang Fei emphasized.

  In the process of stabilizing foreign investment and improving the quality of foreign investment in the future, Sang Baichuan believes that the first is to reduce costs as the main line, and the second is to further simplify administrative approval items and create a pro-business environment in the whole society. At the same time, encouraging the use of online platform to carry out investment promotion activities is important.

  "The prospects for attracting foreign investment in the second half of the year are relatively clear." Sang Baichun notes that the flow of foreign capital into China will remain relatively flat as countries unleash huge amounts of liquidity.

  (Feng Qiyu, China Economic Daily)

  Source: http://www.ce.cn/xwzx/gnsz/gdxw/202008/07/t20200807_35474896.shtml