Leading multinational enterprises in various fields, such as KFC and Standard Chartered, have increased their investment in China recently, as the country remains an outstanding investment destination with rosy innovation opportunities, complete industrial supporting capabilities, high-quality opening up and a favorable business environment.

In November 2023, fast-food giant McDonald's announced its decision to ramp up its stake in its China business from 20 percent to 48 percent. "This underscores McDonald's confidence in the development and business environment of the Chinese market," said Phyllis Cheung, CEO of McDonald's China.

Joe Ngai, chairman of McKinsey & Company in Greater China, said it is hard to find another market that can offer business growth with the same quality, course and value for money.

"Multinational companies should continue to invest in China," Ngai said.

TOP-NOTCH DESTINATION DESPITE HEADWINDS

In 2023, China's actual foreign direct investment (FDI), which remained at a historical high level, hit more than 1.13 trillion yuan (about 158.89 billion U.S. dollars), according to the Ministry of Commerce.

The country's FDI exceeded 1 trillion yuan (including financial investment) for the first time in 2020 and continued stable expansion in 2021 and 2022, earlier data shows.

Although the figure dropped 8 percent last year from 2022, it was still the third highest in history, on a high base and amid shrinking cross-country investment globally, triggered by slowing world economic growth, rising geopolitical risks and weakening external demand.

Foreign capital has moved to demonstrate its confidence in the future of China. Statistics show that the number of newly-established foreign-invested enterprises in China reached 53,766 in 2023, soaring 39.7 percent year on year.

"China attracts about 15 percent of total global investment, still ranking first among all developing countries and in the forefront worldwide," said Zhang Fei, a researcher with the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce.

INCREASING HIGH-TECH OPPORTUNITIES

In 2023, China's high-tech industries became a bright spot in attracting foreign investment. These industries attracted FDI worth 423.34 billion yuan, accounting for a record-high 37.3 percent of the total. The proportion also expanded by 1.2 percentage points compared to the level in 2022.

"China has provided fertile soil for the development and expansion of new technologies and business forms," said Pan Yuanyuan, a researcher at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences.

Its huge market demand and growth potential in the fields of new-energy, digital transformation, intelligent manufacturing and e-commerce, plus its complete industrial supporting capabilities and integration advantages, encourage more multinational companies to increase investment and advance research and development in the country.

In recent years, China has implemented a string of measures to encourage foreign investment in high-tech industries. These measures include clearing manufacturing items on the negative list for foreign investment in pilot free-trade zones, increasing the high-tech manufacturing items on the catalogue of industries that encourage foreign investment, and supporting foreign companies in setting up research and development centers.

In 2024, high-tech industries will remain a hot spot for foreign investment in China.

Earlier this month, the country's top economic planner launched a new batch of flagship foreign investment projects, with a planned total investment over 15 billion U.S. dollars, covering multiples fields, including biomedicine, automobile manufacturing, new-energy batteries and chemical engineering.

NON-STOP OPENING-UP EFFORTS

Over the past years, China has been working on promoting opening up and improving its business environment, and these efforts are yielding results.

The country has taken steps such as shortening the negative list for foreign investment, setting up some pilot free-trade zones, and implementing the Foreign Investment Law. The government also unveiled guidelines containing 24 specific measures to further optimize the foreign investment environment and beef up foreign investment inflow.

China has also provided open platforms for cooperation on the goods, services and supply chains of all countries by holding international business expos, has taken the initiative to align high-standard economic and trade rules, and encouraged localities to attract foreign investment through practical measures.

The country's determination in opening its door wider is helping it maintain its luster as a hot destination for foreign investment.

Last year, FDI originating from France, Britain, the Netherlands, Switzerland and Australia increased by 84.1 percent, 81 percent, 31.5 percent, 21.4 percent and 17.1 percent, respectively.

Another illustration of the optimistic outlook of foreign investors regarding the Chinese market is a recent survey by the European Union Chamber of Commerce in China revealing that about 59 percent of surveyed companies still view China as one of their top three major investment destinations.

"Despite the rising complexity and uncertainty in the external environment, the tailwinds outweigh the headwinds in the Chinese market," Pan said. "The prospects for foreign investors to invest in China still remain promising."

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