Report: China remains as major investment destination for multinationals

(| Updated : 2022-06-20

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Multinationals in China: Rechoice in the Restruction of Global Supply Chains is released during the Third Qingdao Multinationals Summit on June 19. [Photo provided to]

Many multinationals regard China as a major investment destination, and are increasing their investments in China at a stable pace, despite the new round of reshaping the global supply chain, according to a report issued at the Third Qingdao Multinationals Summit on June 19.

Multinationals in China: Rechoice in the Restruction of Global Supply Chains, which was compiled by the Ministry of Commerce's Chinese Academy of International Trade and Economic Cooperation, analyzes the adjustment trend of the global supply chain, the advantages of China's supply chain, and provides advice for multinationals seeking better development in China.

The report said China has continued to attract multinational investment in the manufacturing industry despite the contraction of transnational investment in the sector, thanks to its huge market and complete manufacturing supply chain.

China's FDI inflows remained constant from 2017 to 2021, according to statistics. Due to the impact of the pandemic, actual used FDI fell to $31 billion in 2020, but thanks to its effective control of the COVID-19 pandemic, China attracted $33.73 billion in investment to its manufacturing industry in 2021, an increase of 8.8 percent year-on-year, which was even 1.1 percentage points higher than the growth of the global manufacturing FDI.

In addition, as China has promoted the transformation and upgrading of the manufacturing industry in recent years, multinational companies' investment in China's manufacturing sector has increased, shifting from medium and low-level processing manufacturing to high-tech manufacturing, and from low-tech, low-value-added production parts to high-tech, high-value-added supply chain parts.The actual use of foreign capital in the high-tech manufacturing industry accounted for more than one-third of the total FDI of all manufacturing industries, while that in labor intensive, high energy consumption and heavy pollution industries dropped.  

The report also pointed out that large-scale foreign invested projects have stabilized the attraction of FDI. In recent years, the large-scale foreign invested projects in China have maintained rapid growth, and the number of newly established or capital-increment projects over $100 million has increased from 834 in 2019 to 1,177 in 2021, which has kept a double-digit growth for three consecutive years.

Furthermore, multinationals' operations in China have presented a consistently better performance over the years, which can be seen in their increasing revenues, total amount of profits, profit rates and per capita incomes.

The Qingdao summit, which lasts through June 21, is jointly organized by the Ministry of Commerce and the Shandong People's Government. Themed "Multinationals and China", the summit consists of 44 activities in 14 categories, including investment promotion salons, closed-door meetings, high-level dialogues, and multinational companies' promotions.