Investment from US bucks trend in H1, sign of confidence in China's outlook

Source: Global Times Published: 2020/7/16 22:57:14

A Ghanaian exhibitor talks to guests during the Lanzhou Investment & Trade Fair in Lanzhou, capital of northwest China's Gansu Province, July 4, 2019. (Xinhua/Chen Bin)

Actual foreign investment from the US in China increased 6 percent in the first half of 2020, in contrast to a decline in total foreign investment during the period, according to the Ministry of Commerce on Thursday.

Over the first six months of this year, China's actual foreign inbound capital dropped 1.3 percent year-on-year, but that from the US remained robust, along with inflows from some other key countries and regions. 

Actual foreign investment from economies involved with the Belt and Road Initiative rose 2.9 percent. Investment from the Hong Kong Special Administrative Region into the Chinese mainland was up 4.2 percent, and Singapore's investment increased 7.8 percent. 

"The resilience of foreign investment, especially from the US, shows that foreign investors have strong confidence not just in China's speed in recovery, but also its long-term fundamentals such as the rise of the middle class and a more open market," said Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology.

"That is why foreign companies are still betting big on the Chinese market," Dong said.

In the first quarter, there were several large merger and acquisition (M&A) deals in China involving foreign companies. For example, in February, US-based beverage bellwether Pepsi agreed to buy Chinese snack brand Be & Cheery's for $705 million.

Apart from M&A, policy restrictions were relaxed in China to encourage more investment, Tian Yun, vice director of the Beijing Economic Operation Association, told the Global Times on Thursday. 

Early this year, China implemented a new Foreign Investment Law, introducing a negative list that allows more scope for foreign businesses to participate in the economy. In April, China scrapped the cap on foreign shareholding in securities and fund management firms, a move that further opened up its financial sector. 

"These policies have been generally very well-received by foreign investors," Tian said. "It is a strong indication that China's market, which is still growing at a significant pace, is welcoming to investors from around the world."

Newspaper headline: Investment from US bucks trend in H1, sign of confidence in nation

Posted in: ECONOMY

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