The Q2 China Foreign Investment Business Environment Research Report shows that multinational corporations have stable investment confidence in China. Foreign funded enterprises | China Council for the Promotion of International Trade | Research
On July 28th, the China Council for the Promotion of International Trade released the "Research Report on the Business Environment of Foreign Investment in China in the Second Quarter of 2023". The report shows that nearly 90% of the surveyed foreign-funded enterprises are satisfied with the indicators of obtaining business premises, paying taxes, completing completion procedures, resolving commercial disputes, installing municipal public infrastructure, market access, cross-border trade, and promoting market competition in China. More than 90% of the surveyed foreign-funded enterprises are satisfied with the foreign investment policies introduced by the central government since the fourth quarter of 2022, and nearly 90% of the surveyed foreign-funded enterprises are satisfied with the foreign investment measures introduced by local governments.
At the press conference held on the same day, Sun Xiao, spokesperson for the China Council for the Promotion of International Trade, stated that the research report reflects that since the beginning of this year, with the overall recovery of China's economy, the confidence of multinational enterprises in investing in China has remained stable, and the overall trend of foreign investment in China has not changed.
Sun Xiao introduced that from the perspective of business operations, nearly 70% of the surveyed foreign-funded enterprises are optimistic about the prospects of the Chinese market in the next five years, over 90% of the surveyed foreign-funded enterprises believe that the attractiveness of the Chinese market is increasing or remaining unchanged, and over 80% of the surveyed foreign-funded enterprises expect that the investment profit margin in China will remain unchanged or increase this year.
From the perspective of investment motives in China, "large market size," "multiple preferential policies," and "complete industrial and supply chains" are the main motives for foreign companies surveyed to invest in China, accounting for 77.54%, 53.36%, and 39.91%, respectively.
From the perspective of development opportunities, the interviewed foreign-funded enterprises believe that "technological innovation and research and development", "continuous market opening in the central and western regions", and "digital economy" provide significant opportunities for their development in China, accounting for 60.66%, 44.49%, and 43.63% respectively. Among them, "technological innovation and research and development" has become the most important development opportunity for two consecutive quarters.
It is understood that in the second quarter of this year, the China Council for the Promotion of International Trade conducted research visits to nearly 800 foreign-funded enterprises from 26 provinces, regions, and cities across the country, forming this report. Among the surveyed subjects, 59.82% of foreign-funded enterprises come from the processing and manufacturing sector, and 64.6% are small and micro enterprises.
Recently, the China Council for the Promotion of International Trade organized activities for foreign-funded enterprises to visit Tianjin and Sichuan. Regarding the effectiveness and response of the event, Sun Xiao stated that all parties have given full recognition and high praise to the event, and the foreign-funded enterprises participating in the event have further enhanced their confidence in investing in China; The Foreign Business Association stated that it is easier to more accurately promote investment opportunities to member companies; The relevant departments of the Tianjin and Sichuan governments have stated that they will continue to provide feedback on the handling of corporate appeals, closely monitor foreign investment intentions, and make greater efforts to attract and utilize foreign investment.
Sun Xiao stated that since the beginning of this year, the focus of the China Council for the Promotion of International Trade's work in serving foreign-funded enterprises has shifted to conducting in-depth research, promoting the optimization of the business environment, and helping local investment attraction. "Next, the China Council for the Promotion of International Trade will strengthen coordination and cooperation with relevant departments, promote the resolution of reasonable demands of foreign-funded enterprises, and promote the landing of more high-quality foreign-funded projects."
The press conference also released information on the global economic and trade friction index for May this year. Its comprehensive index shows that the global economic and trade friction index for the month was 180, still in a high range, but decreased by 55 points compared to the same period last year and increased by 55 points compared to the previous month. The amount involved in global economic and trade friction measures increased by 28.1% year-on-year and 59.5% month on month.
From the perspective of country indices, Russia, the United States, and Japan rank among the top three in terms of economic and trade friction indices among the 20 countries, while Brazil, India, the United Kingdom, South Korea, and the European Union also have high economic and trade friction indices. Among them, the economic and trade friction index of the United States continues to remain high, while the China index for the month was 29, at a medium low level.
From the perspective of industry indices, industries such as electronics and mechanical equipment have become the main conflict points of economic and trade friction measures. Among the 13 major industries within the monitoring scope, the electronics industry ranks first in the industry's economic and trade friction index, while the transportation equipment, mechanical equipment, chemical, light industry, and pharmaceutical industries are also at a high level.
From the perspective of sub indices, the import and export tariff measures index ranks first among the five categories of measures indices. In terms of the number of measures, since the beginning of this year, in addition to the year-on-year growth of trade relief measures, the four sub measures of import and export tariffs, technical trade measures, import and export restrictions, and other restrictive measures have all shown a downward trend year-on-year.
In terms of economic and trade frictions related to China, the index of economic and trade frictions related to China among 19 countries was 581, which remained at a high level, but decreased by 709 points compared to the previous month. The amount of measures involved in economic and trade frictions related to China increased by 72.9% year-on-year and 103.6% month on month. Among them, Japan has the highest index of economic and trade friction with China, while industries such as electronics, light industry, mechanical equipment, chemical industry, pharmaceuticals, and transportation equipment have a high index of economic and trade friction with China.
