China will further improve its conditions for foreign investment, and encourage global companies to invest in its services and financial sectors to stabilize the inflow of foreign direct investment in the second half of 2023, commerce officials said on Wednesday.
Given the slowdown in global economic recovery and the decline in cross-border investment, China will continue to shorten the negative list for foreign investment access and offer timely assistance to overseas companies to help them solve their problems, said Guo Tingting, vice-minister of commerce.
Zhu Bing, head of the Commerce Ministry's Foreign Investment Administration, said at a news conference in Beijing that China will steadily expand its institutional opening-up in the services sector, and revise administrative measures for foreign investors' strategic investment in listed companies to encourage overseas companies to invest in its stock market.
"Apart from effectively implementing existing policies, the government will prioritize addressing common concerns raised by foreign companies, including fair competition and investment facilitation," he said, adding that new measures will also be introduced in the second half of the year to boost foreign investors' confidence in China.
Foreign direct investment in the Chinese mainland dropped 2.7 percent year-on-year to 703.65 billion yuan ($97.47 billion) in the first half of the year, according to data from the ministry published on Wednesday.
Zhu said that short-term data fluctuations have no bearing on the sustained positive prospects for foreign investment in China.
He pointed out the notable increase in visits by executives from multinational companies, who extensively evaluate China's business environment and actively explore new investment and cooperation prospects.
That sentiment is in line with the latest data. China saw its newly established foreign-invested enterprises between January and June reach 24,000, a year-on-year increase of 35.7 percent.
Pan Yuanyuan, an associate researcher at the Chinese Academy of Social Sciences' Institute of World Economics and Politics in Beijing, said that more efforts should be made to meet the expectations of multinational corporations in the second half.
In addition to reinforcing China's advantages in the industrial chain, there is an urgent need to simplify procedures for FDI, such as ensuring the regulatory processes are streamlined and efficient, Pan said. This will make it easier for foreign investors to navigate the system, she added.
Michael Hart, president of the American Chamber of Commerce in China, said there is still room for China to improve its business environment, especially in areas of public procurement, standard establishment and protection of intellectual property rights.
"For instance, our members in the healthcare industry expressed their need for more support in various areas including government procurement," he said.
According to the State Administration of Foreign Exchange, the return on FDI in the Chinese mainland had been around 9.1 percent over the past five years, while in Europe and the United States, it was around 3 percent.
Developed countries' investment in China continued to grow between January and June. FDI from France, the United Kingdom and Japan surged year-on-year by 173.3 percent, 135.3 percent and 53 percent, respectively, according to the Ministry of Commerce.
Upbeat about the Chinese market, German conglomerate Siemens AG announced in mid-June that it will invest 140 million euros ($157.12 million) in Chengdu, the capital of Southwest China's Sichuan province.
The digital transformation of China's industrial sector is advancing rapidly, which is why the local market is very attractive to Siemens, said Roland Busch, chairman and CEO of Siemens AG. China is the world's largest industrial market, and its share of manufacturing output accounts for nearly 30 percent of the global total, he said.
During a visit to Beijing earlier this week, Yasuhiro Sato, chairman of the Japan-China Investment Promotion Organization, said that China, as the world's second-largest economy, is an important overseas market for Japanese businesses, and the vast majority of the organization's member companies are willing to expand investment in China.