Question: Recently, some UK media outlets reported that foreign investment in China fell to the lowest level in 30 years. What is your comment?

Embassy Spokesperson: Such reports, which selectively interpret China’s data, are seriously misleading and expose the relevant British media outlets’ lack of professionalism and rigour in reporting China's economy. I would like to share the following facts:

First, foreign direct investment rises and falls. This is normal around the world. In recent years, due to the impact of COVID-19 on global economy, drastic adjustments in developed economies' monetary policies, and a more complex international political landscape, global FDI has been more volatile, as evidenced by its continuous decline after reaching a relatively high level in 2021. In particular, the US Federal Reserve's interest rate hikes have led to the increased cost of dollar financing. As a result, multinational corporations have reduced their investments in the form of equity capital, reinvestment of earnings, and intra-company loans. China's FDI is basically in line with the global trend. Therefore, when interpreting the relevant data, it is important to take into consideration the historical baseline and fluctuations. The conclusion of "foreign capital flee from China” is simply untenable if it is based on the decline in data for a particular year.

Second, foreign investment in China is still at a historically high level. Ministry of Commerce data show that in 2023, paid-in FDI in China totaled 163.3 billion dollars, the third highest in history after 2021 and 2022. In 2023, 53,766 foreign-invested enterprises were established, up by 39.7% year on year. The structure of foreign capital use was further optimised, with foreign capital in high-tech industries expanded by 37.4%, marking a new record high. And foreign investors from France, the UK, the Netherlands, and Switzerland continued to increase their investments in China, with growth rates of 84.1%, 81%, 31.5%, and 21.4% respectively.

Third, China's advantages in attracting foreign investment are stronger. In terms of domestic and international environment, the market expects shifts and adjustments in major developed economies’ monetary policies, global liquidity will improve on the whole, and international investment will be more active. China's economy has continued to recovery, its business environment is further improving, and foreign investors are expected to be more willing to make investment. In terms of industrial base and domestic demand potential, China is the only country with industries across all categories in the industrial classification. With robust industrial support and integration capabilities, as well as high-caliber workforce, China will provide stronger support for foreign enterprises coming to China. China's middle-income group of more than 400 million people provides a vast market that cannot be ignored. In terms of the structure of foreign investment, with the continuous development of electronic technology, new energy, semiconductor, and intelligent technology, these sectors promise to become new growth areas for foreign investment in China.

All in all, the fundamentals sustaining the positive trajectory of China’s long-term economic development remain unchanged. China is accelerating the development of new productive forces and taking more substantive steps towards high-standard and institutional opening up. China will continue to be a preferred destination for foreign investment. It is hoped that the relevant media organisations will report China's economy objectively and comprehensively, and avoid missing opportunities and damaging themselves.