Some overseas companies have had operational difficulties in China, but this is not to say that China's investment environment is worsening in general for overseas companies, a government official said on Tuesday during a press conference held by the Ministry of Commerce (MOFCOM).
"Most overseas companies are still confident about investing in China," Shen Danyang, spokesman of the MOFCOM, said at the press conference.
He also noted that recently some overseas media complained about the deteriorating investment environment in China. But such complaints are "biased" and can't fully represent the whole picture of China's investment climate, Shen said.
Li Xiaogang, director of the Foreign Investment Research Center at the Shanghai Academy of Social Sciences, said that the nature of overseas investment in China has changed a lot in recent years.
According to Li, when overseas companies first entered China, their aim was mostly to take advantage of China's low costs.
"Most of their projects, like building a plant, did not target the domestic market. But nowadays, those overseas companies need to put more effort into exploring the domestic market," he told the Global Times on Tuesday, adding that foreign companies in China have been transitioning from an export-driven business model to a domestically focused model.
"With fiercer competition from domestic companies, some of the overseas enterprises don't do well with Chinese customers, and they believe the reason for that is the country's deteriorating business climate," Li noted. "But actually, it's their inability to adapt to changes that caused their business to decline."
Shen also said that some overseas enterprises that relied on preferential policies have had difficulties in China.
According to Li, many overseas companies want to be treated like domestic companies in terms of market access, but they are also unhappy about losing preferential policies, like tax and land.
"Those preferential policies are unfair to domestic enterprises," Xu Hongcai, director of the Economic Research Department under the China Center for International Economic Exchanges, told the Global Times on Tuesday.
Xu stressed that the business climate in China for overseas companies has actually improved in recent years, with government measures such as promoting the negative list mechanism and developing free trade zones.
"Overseas companies in China should seize those opportunities," Xu said.
Data revealed by Shen showed that 18,538 foreign-funded enterprises were set up in China from January to August, up 10.2 percent year-on-year. Of those enterprises, about 490 were large companies with an investment of more than $100 million.
Shen also stressed that the government will continue to attach importance to overseas companies' concerns and work toward a more transparent investment environment in the country.
Xu said that companies that understand China's market changes and domestic customers' needs are more likely to succeed.
