In the first two months, the national absorption of foreign investment increased by 31.5% year-on-year, and more favorable news is coming

The latest data released by the Ministry of Commerce shows that in January and February 2021, the actual use of foreign investment in China was 176.76 billion yuan, a year-on-year increase of 31.5% (excluding the banking, securities, and insurance sectors, the same below). It is worth noting that the field of stabilizing foreign investment will also face multiple favorable policies. Among them, further reduction of the negative list for foreign investment access, formulation of a negative list for cross-border service trade, preparation and release of the "14th Five Year Plan for Utilizing Foreign Investment Development", and the launch of the fifth batch of major foreign investment projects are highly anticipated.

　　While achieving significant growth in total, China's absorption of foreign investment also presents many highlights. From an industry perspective, the actual use of foreign investment in the service industry in the first two months was 141.74 billion yuan, a year-on-year increase of 48.7%, accounting for 80.2% of the country's actual use of foreign investment. Among them, the wholesale and retail industry, accommodation and catering industry, and leasing and business services industry grew by 54.1%, 45.6%, and 70.3% respectively.

　　From the source, the actual investment of the countries along the "the Belt and Road", ASEAN and the EU increased by 26.2%, 28.1% and 31.5% year on year respectively (including the data of investment through free ports).

　　From a regional distribution perspective, the absorption of foreign investment in the eastern, central, and western regions of China increased by 32.3%, 11.1%, and 50.9%, respectively.

　　At the same time, more stable foreign investment policies are expected to accelerate their implementation. This year's government work report clearly states the active and effective utilization of foreign investment. Further reduce the negative list for foreign investment access. Promote the orderly opening up of the service industry, establish comprehensive pilot projects for expanding the opening up of the service industry, and formulate a negative list for cross-border service trade.

　　At the press conference of the State Council Information Office on March 8th, Ning Jizhe, Deputy Director of the National Development and Reform Commission, stated that China has revised the negative list for foreign investment access for four consecutive years from 2017 to 2020, and the cumulative reduction of restrictive measures has been nearly two-thirds. A series of major opening-up measures have been launched in the fields of finance, automobiles, etc., and the manufacturing industry has now been basically opened up. This year, we will further reduce the negative list of foreign investment access, consolidate the measures to open up the manufacturing industry, focus on promoting the orderly opening up of the service industry, introduce advanced technology, management experience, and business models more widely, and promote high-quality economic development through high-level opening up

　　Ning Jizhe also stated that on the basis of launching four batches of major foreign investment projects in the early stage, the fifth batch of major foreign investment projects will be launched this year, providing policy support for industrial planning, land use, environmental impact assessment, energy use, etc., and continuing to make advanced manufacturing, high-tech and other fields the main direction of support for major foreign investment projects.

　　At the previous press conference of the State Council Information Office, Minister of Commerce Wang Wentao pointed out that the actual use of foreign capital in China's non-financial sector increased by 4.5% last year, becoming the world's largest inflow of foreign capital. The Ministry of Commerce will, in accordance with the decisions and arrangements of the Central Committee of the Communist Party of China and the State Council, focus on promoting the use of foreign investment to stabilize the total amount, optimize the structure, and improve the quality.

　　Subsequently, on March 1st, the Ministry of Commerce issued the "Notice on Stabilizing Foreign Investment around Building a New Development Pattern" (hereinafter referred to as the "Notice"), proposing 22 specific measures from five aspects, clarifying the path to stabilizing foreign investment in 2021, proposing to create a new highland for reform and opening up, ensuring the implementation and effectiveness of opening-up measures in the automotive, financial and other fields, continuously increasing the protection of foreign investment, improving the service guarantee system for foreign investment, and preparing and publishing key tasks such as the "14th Five Year Plan for Utilizing Foreign Investment Development".

Source/Economic Reference Report