Wei Jianguo: An Upsurge in Foreign Investment Appears After the Two Sessions

Although China’s economy has been greatly affected by the pandemic, many foreign-invested projects have nonetheless been implemented across China, showing that China is still a popular destination of foreign investment. It also proves that the “six stabilities” and “six guarantees” policies launched by the central government are correct. Foreign investment this year is likely to increase by more than 6% to reach $150 billion.

After the two sessions, there will be a new upsurge in foreign investment across China.

On May 17, a virtual online signing ceremony for the phase III investment ($5.6 billion) of the CNOOC and Shell Petrochemical Company joint venture was completed. Managers and officials from Beijing, Guangzhou and Hague participated in the event.

On April 22, the $10 billion ethylene project invested by ExxonMobil had a virtual online groundbreaking in Huizhou.

Even during the pandemic, the $1.5 billion 20GWh lithium battery project of Westlake New Energy also had its grand opening at the Zhonghe Industrial Park in Jiashan County, Zhejiang Province.

The recent advancement of these foreign-invested projects has the following implications.

First, the phase III of the CNOOC and Shell Petrochemical Company joint venture is the largest project signed since the breakout of the pandemic, indicating that the central government’s “six stabilities” policy has achieved remarkable results.

Despite the severe global pandemic and uncertain economic recovery, foreign investors decided to invest heavily in China because they have seen the success of China’s pandemic control and hence are confident about China’s further reform and opening-up as well as the business environment. China is not only a huge consumer market for daily necessities, but also an important part of the global industrial chain and supply chain. Investing in China will offer investors a great reward.

Second, many foreign-invested projects have been launched during the pandemic, showing that great achievements have been made in China’s supply-side reform.

China’s high-quality development needs to further deepen the supply-side reform. These foreign investment projects are featured with high-quality and high-tech. For example, Tesla’s investment in Shanghai is the first mega factory built outside the United States. All these demonstrate the importance of China’s supply-side reforms and economic restructuring. They will also help China to create an industrial and supply chain focusing on the domestic market, increase its global competitiveness, and stabilize China’s status as a global manufacturing center.

Third, the central and local governments, coastal and inland regions, state-owned and private enterprises are all working hard on attracting foreign investments.

The spread of the pandemic at home and abroad this year has brought new challenges to attracting foreign investment. Thus, 24 provinces, autonomous regions and municipalities across the country issued 45 policy documents on stabilizing foreign investment. During the two sessions, Ning Jizhe, Deputy Director of the National Development and Reform Commission, said that the fourth batch of major foreign investment projects will be launched this year, and the 2020 edition of the negative list of foreign investment access and the encouraged foreign investment catalogue will be issued. Moreover, more favorable policies will be made by the central and local governments after the conclusion of the two sessions.

All these facts have proved that the “six stabilities” and “six guarantees” policies launched by the central government are correct. Last year, China attracted foreign investment of $140 billion and this figure is expected to reach $145 billion, or even increase by more than 6% to $150 billion.