Promoting Stable and High Quality Demand for Foreign Trade and Investment | China | Foreign Investment
In the first half of this year, facing adverse effects such as weak global economic recovery and shrinking external demand, China's import and export of goods reached a new historical high of 20.1 trillion yuan; The quality of foreign investment utilization has been improved, especially in the high-tech manufacturing industry, where the actual use of foreign investment has increased by 28.8%. Foreign trade and investment continue to stabilize and improve under heavy pressure.
Several experts pointed out in interviews that the current challenges and opportunities in the development of foreign trade and investment coexist, and effective measures should continue to be taken to promote the sustained stability and quality improvement of foreign trade and investment.
Strong resilience in foreign trade and investment
In the first half of the year, China firmly promoted high-level opening-up to the outside world, promoted stable scale and optimized structure of foreign trade, and made greater efforts to attract and utilize foreign investment.
"Against the backdrop of sluggish global external demand growth and increased uncertainty, the hard won results of foreign trade in the first half of the year demonstrate that foreign trade has strong resilience and vitality," said Zhao Ping, Dean and Researcher of the Research Institute of the China Council for the Promotion of International Trade.
In the first half of the year, China's overall foreign trade scale achieved a positive growth of 2.1%, with a year-on-year increase of over 400 billion yuan in total import and export value. Yang Changyong, a researcher at the Institute of Foreign Economics at the China Academy of Macroeconomics, stated in an interview that in the first half of the year, exports from major economies in the world mostly experienced low-speed growth or even negative growth. In contrast, China's foreign trade development performance during the same period was better than the average level of major economies.
In the first half of the year, the quality of China's foreign trade development steadily improved. "While stabilizing exports to developed economies, exports to developing countries and emerging markets such as ASEAN are growing rapidly." Zhao Ping said that new high-tech products are becoming an important driving force for China's export growth. In addition, from the perspective of regional layout, the pace of opening up and development in the central and western regions and the three northeastern provinces has accelerated.
Affected by multiple factors, global foreign direct investment is still facing downward pressure this year. Coupled with high base factors in the same period of 2022, China's actual use of foreign investment in the first half of the year decreased by 2.7% year-on-year, but the overall scale remained stable.
"Short term data fluctuations do not affect foreign investment's continued optimism about China's development prospects, and the overall trend of expanding investment in China has not changed," said Zhu Bing, Director of the Foreign Investment Management Department of the Ministry of Commerce.
In the first half of the year, there were 24000 new foreign-invested enterprises established nationwide, a year-on-year increase of 35.7%. "The rapid growth in the number of newly established foreign-funded enterprises indicates that China remains a very important destination for multinational corporations' investment. China's super large market advantage remains an important factor in attracting cross-border investment," said Wang Xiaohong, Deputy Director of the Research and Information Department of the China International Economic Exchange Center.
Developed countries have maintained an increase in investment in China, with investment in France, the United Kingdom, Japan, and Germany increasing by 173.3%, 135.3%, 53%, and 14.2%, respectively. "The investment of multinational corporations from developed countries in China continues to grow exponentially, further improving the integration level of China's industrial and supply chains with developed countries," said Wang Xiaohong.
Stable foreign trade and favorable conditions for foreign investment
Experts say that despite facing a complex and severe external environment, China still has favorable conditions for stabilizing foreign trade and foreign investment.
Data shows that in the first half of the year, the import and export of private enterprises in China reached 10.59 trillion yuan, a year-on-year increase of 8.9%, accounting for 52.7% of the total import and export value. During the same period, foreign-invested enterprises imported and exported 6.16 trillion yuan, accounting for 30.7% of the total import and export value. "In recent years, private enterprises have gradually become the main force behind the stable growth of China's foreign trade, surpassing foreign-funded enterprises. However, foreign-funded enterprises still occupy a stable share in imports and exports. Therefore, stabilizing foreign trade must also stabilize foreign investment. In a certain sense, stabilizing foreign investment is stabilizing foreign trade," said Wang Xiaohong.
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In the first half of the year, China's economy continued to recover and overall rebounded, high-quality development was solidly promoted, and the overall social situation remained stable. A series of policy measures were successively implemented, creating favorable conditions for stabilizing foreign trade and foreign investment.
Since the beginning of this year, executives from multiple multinational corporations have continued to visit China, comprehensively and deeply examining the business environment in China, and seeking new opportunities for investment cooperation. The "2023 Q2 China Foreign Investment Business Environment Research Report" released by the China Council for the Promotion of International Trade shows that nearly 70% of the surveyed foreign-funded enterprises are optimistic about the prospects of the Chinese market in the next five years, and over 90% of the surveyed foreign-funded enterprises believe that the attractiveness of the Chinese market will increase or remain unchanged.
As the city with the most concentrated regional headquarters and foreign R&D centers of multinational corporations in mainland China, Shanghai has a total of 922 regional headquarters and 544 foreign R&D centers in the first half of this year. Since 2023, Jiangsu has taken practical measures to promote the stable stock and expansion of foreign investment, and is preparing to introduce the Jiangsu Province Foreign Investment Regulations, effectively safeguarding the legitimate rights and interests of foreign investment and continuously enhancing its attractiveness to high-quality global resources.
"Promoting high-level opening-up to the outside world, steadily expanding institutional openness in terms of rules, regulations, management, standards, and other aspects of international economic and trade rules, will help build a more mature and standardized high-level socialist market economy system, and further stimulate the vitality of various business entities." Wang Xiaohong said.
In terms of stabilizing foreign trade, this year's exports face both challenges and opportunities. Yang Changyong stated that the growth rate of foreign trade has significantly declined in the past two months, and we should remain vigilant about this. He believed that emerging markets and developing countries, especially many countries along the "the Belt and Road", maintained high economic growth and strong desire for openness and cooperation, which provided favorable international market conditions for the development of foreign trade.
Take solid measures to address challenges
In response to the complex and severe external environment in the second half of the year, experts suggest that China should fully leverage its advantages in the ultra large market to expand domestic demand, solve the practical difficulties faced by enterprises in operation, and take solid measures to address the challenges of stabilizing foreign trade and foreign investment in the second half of the year.
Zhao Ping stated that in order to achieve the goal of stabilizing the scale and optimizing the structure of foreign trade, continuous efforts should be made to help enterprises reduce costs and increase efficiency. We should make good use of the institutional dividends of the comprehensive implementation of RCEP in the new stage, and help enterprises further explore the international market. At the same time, it is necessary to maintain the basic stability of the RMB exchange rate at a balanced level of reasonable control.
Yang Changyong said that every effort should be made to tap the market potential along the "the Belt and Road", develop more marketable, high-quality and affordable products, consolidate the recognition of developing countries' markets for our products, and enhance the reputation of Chinese brands. At the same time, we attach great importance to the export markets of developed countries in the United States and Europe, and support enterprises to deeply cultivate and cultivate the markets of developed countries.
In the second half of the year, global cross-border investment still faces significant downward pressure, making the external environment for attracting investment in China more severe and complex. At the same time, China's economy has strong resilience, great potential, and abundant vitality, and the long-term positive fundamentals have not changed. "China's comprehensive advantages in attracting investment, consisting of a complete industrial system, complete infrastructure, abundant talent resources, and continuously optimized business environment, are also constantly strengthening," said Zhu Bing.
Experts suggest that efforts should continue to promote the rational reduction of negative lists for foreign investment access, and further cancel or relax restrictions on foreign investment access. Deepen the construction of comprehensive demonstration zones for expanding the opening up of the national service industry, launch a new batch of innovative pilot measures, and steadily expand the institutional opening up of the service industry. Revise the Measures for the Administration of Strategic Investment by Foreign Investors in Listed Companies to further relax restrictions on foreign investors' strategic investment in listed companies.
In addition, on the basis of continuing to implement existing policies to stabilize foreign investment, China will focus on the common demands reflected by foreign-funded enterprises, such as fair competition, investment facilitation, and factor protection, and promote the introduction of a new batch of policy measures to optimize the foreign investment environment and vigorously attract foreign investment. By continuing to organize the "Year of Investment in China" series of activities, we will continuously improve the level of foreign investment service guarantee.