China’s FDI (foreign direct investment) structure seems to meet new changes. Foreign investment is entering the high-tech manufacturing and service industries at a fast pace. Data from the Ministry of Commerce shows that in the first nine months of this year, China set up 23,541 foreign-funded enterprises, an increase of 10.6 percent from last year Meanwhile, foreign direct investment in China rose 1.6 percent year-on-year between January and September to 618.57 billion yuan ($93.47 billion). In the first nine months, the manufacturing sector attracted FDI worth 181.76 billion yuan, up 7.5 percent year-on-year, accounting for nearly 30 percent of the total FDI. The service sector drew 428.2 billion yuan, or 69.2 percent of the total. Some 52.98 billion yuan flowed into the high-tech manufacturing sector, an increase of 27.5 percent year-on-year. The high-tech service industry attracted 91.59 billion yuan, up 24 percent year-on-year. Twenty years ago, 70 percent of foreign investment was made in the manufacturing sector, while only 30 percent was in the service sector. Now, the structure reverses.
JUMORE Reviews
Although foreign investment is withdrawing from China’s low-end manufacturing industry, more foreign capital is flowing into the high-tech manufacturing and service sectors. One of the important reasons is that the continuously lowered cross-border investment threshold set by the country has given foreign investors easier access to those emerging industries.
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