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Rosy picture of foreign investment in China

Updated: Nov 12,2015 3:28 PM

Latest data of foreign investment in China released by the Ministry of Commerce indicates a promising prospect for foreign investment in the world’s second-largest economy.

According to an official from the Ministry of Commerce, foreign investment continued to grow in the first 10 months.

From January to October, the number of foreign-invested enterprises rose to 21,022, with a 9.3 percent year-on-year growth and actual use of foreign investment reached 639.42 billion yuan ($100.45 billion), with a 8.6 percent year-on-year growth.

In October, 2,042 foreign-invested enterprises were established with a 2.5 percent year-on-year rise and actual use of foreign investment rose to 54.68 billion yuan, with a 4.2 percent year-on-year growth.

Compared with the current slide of transnational investment in the world, foreign investment in China in the 10-month period shows foreign investors’ confidence in China’s investment environment considering the potential of China’s huge market and the country’s efforts in creating a better business environment.

Pilot free trade pilot zones served as engines to drive foreign investment as in the first 10 months actual use of foreign investment in eastern regions amounted to $88.41 billion, with a 10.1 percent year on year growth, and 9,859 foreign-invested enterprises were established along the Yangtze River economic belt in the period, with a 7.8 percent year-on-year rise, accounting for 47 percent of newly established enterprises in the country, the official said.

Optimized foreign investment allocations

From January to October, foreign investment in the service industry rose to $63.42 billion, with a 19.4 percent year-on-year growth, accounting for 61.2 percent of foreign investment in the country.

Foreign investment in the high-tech service industry rose to $6.76 billion, with a 57.5 percent increase from the same period last year.

Foreign investment in scientific research, information technology service, and research, development and design service saw a major rise, with 86.5 percent, 48.8 percent, and 41.3 percent year-on-year growth, respectively.

Foreign investment in the manufacturing industry reached $32.6 billion, with a 0.2 percent year-on-year growth, accounting for 31.4 percent of total foreign investment in the country.

The high-tech manufacturing industry witnessed a 11.6 percent increase, with $7.58 billion foreign investment, accounting for 23.3 percent of foreign investment in the manufacturing industry.

Foreign investment in communication device manufacturing, electronic components manufacturing, and chemical medicine manufacturing saw 143.6 percent, 36.2 percent, and 20.8 percent, respectively.

Divide in foreign investment

Despite increase of foreign investment, there is a divide among investment from different countries and regions.

Foreign investment from Association of Southeast Asian Nations, European Union, countries along the Silk Road Economic Belt and the 21st Century Maritime Silk Road, Hong Kong, and Macao witnessed 10.8 percent, 13.7 percent, 14 percent, 12.6 percent, and 68.9 percent rise, respectively, while investment from Japan, the United States, and Taiwan declined by 25.1 percent, 13.6 percent, and 19.3 percent, respectively.

Foreign investment active in merger and acquisition

Foreign investment in merger and acquisition saw a substantial increase as in the 10-month period, 1,122 foreign-invested enterprises were established through merger and acquisition, with a 16 percent year-on-year growth.

Foreign investment in merger and acquisition as a proportion of total foreign investment rose from last year’s 6 percent to 15.4 percent.