MANILA — China became the world’s top destination for new foreign direct investment (FDI) in 2020 despite the challenges the pandemic brought in. It has also introduced a series of policies to further improve its business environment. A report the UNCTAD (United Nations Conference on Trade and Development) released in late January, shows that China withstood the global economic downturn and recorded four percent growth in FDI inflows, overtaking the United States as the largest recipient in 2020.
Meanwhile, FDI into the Chinese mainland expanded 6.2 percent year-on-year to a record high of nearly one trillion yuan in 2020, said its Ministry of Commerce. In dollar terms, the inflow went up 4.5 percent year-on-year to US$144.37 billion.
In Jinan, Shandong province in eastern China, German forklift manufacturer Kion Group AG invested 1.34 billion yuan to start locally producing forklifts. It started construction of its plant in October 2020. It is expected to produce 40,000 forklifts per year. The first phase of the project will be finished by November this year, with the annual production capacity to reach 26,000 by then.
“China has quickly recovered from the coronavirus, and as one of the fastest-growing markets globally, it plays a key role in our strategy,” said Gordon Riske, chief executive officer of the group.
China strives to reduce barriers to foreign investment with the establishment of more free trade zones (FTZs) and the passage of the Foreign Investment Law. From 2016 to 2020, 17 pilot FTZs were built, bringing the total number to 21. Pilot FTZs will be granted greater autonomy in decision-making.
In other areas, large-scale exhibitions like the 2020 China International Fair for Trade in Services and the third China International Import Expo took place as scheduled, an indication China is determined to open up at an even higher level.
Zhan Xiaoning, an official in charge of investment and enterprises at UNCTAD, said China’s fast economic recovery and investment facilitation policies played a crucial role in boosting foreign investment. It is likely the only major economy to post growth in 2020, with its GDP (gross domestic product) expanding 2.3 percent to exceed the 100-trillion-yuan threshold for the first time.
“While ensuring the strict prevention and control of the pandemic, China has encouraged enterprises to resume work and production, which not only guaranteed the industrial and supply chains of foreign enterprises but also boosted their confidence to invest in China,” said Zhan. (BG/Headline PH)