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Laws of economics bring foreign capital closer to China

2020-07-31 12:26:43 People’s Daily Online

The combined risks of COVID-19, anti-globalization, trade friction, debt woes, global recession and geopolitics have no doubt amplified the uncertainties of the world.

The combined risks of COVID-19, anti-globalization, trade friction, debt woes, global recession and geopolitics have no doubt amplified the uncertainties of the world.

However, newly released economic figures indicated that the Chinese GDP returned to positive growth in the second quarter, expanding 3.2 percent year-on-year. China also witnessed positive growth in both imports and exports in June and realized an 8.4-percent year-on-year growth in actual use of foreign investment in the second quarter, which signaled foreign investors’ stable and growing expectations of and confidence in the Chinese market.

Foreign investment in China had gathered momentum month by month and seen promising prospects for long-term growth in the first half of this year.

Global foreign direct investment (FDI) would fall below $1 trillion in 2020 for the first time since 2005 as a result of the COVID-19 pandemic, according to the World Investment Report 2020 released by United Nations Conference on Trade and Development (UNCTAD) on June 16.

Meanwhile, in the first half of this year, the actually utilized FDI of China stood at 472.18 billion yuan (about $67.93 billion, excluding foreign investment in banking, negotiable securities, and insurance sectors), dropping by 1.3 percent compared to that of the same period last year.

With COVID-19 being gradually brought under control in China, the actual use of FDI in the country has begun to recover since April, during when the country utilized a total of 70.36 billion yuan of foreign investment, up 11.8 percent from a year ago.

The figure was followed by continuous robust positive growth and a marked upturn in the area.

China is seeing new trends in foreign investment activities, with FDI in China’s high-tech service industry growing rather rapidly.

As China intensifies its efforts on high-quality economic development and the construction of a modern economic system, more than 70 percent of the inward FDI has been used in China’s high-tech service industry, while the proportion used to go into the country's manufacturing sector.

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