Foreign investor confidence in China is on the rise. The country has improved its ranking as an attractive investment destination over the next three years, jumping to third place from seventh in 2023 and continuing to lead emerging markets, according to a report published by Kearney on Monday. The report aims to understand the views of global investors on future foreign direct investment (FDI) flows.
Analysts said such a level of confidence showed that global investors were optimistic about China’s economic outlook, as several indicators had exceeded expectations since the start of 2024.
They said the report shows that global enterprises are not following the US policy of suppressing China and have begun to actively invest in the Chinese market, whose potential is huge and obvious.
The performance of emerging markets improved significantly overall in 2024, with China jumping four places to third, according to Kearney’s 2024 Foreign Direct Investment Confidence Index (FDICI) report released Monday by Kearney. a global management consulting firm.
China’s FDICI stood at 2,210, a close second to Canada’s ranking of 2,235. The U.S. remains the top FDI destination with an index of 2,340, the report said.
It was not easy for China to rise from seventh to third place in such a short period of time, as FDI inflows suffered a big drop during the pandemic in the previous two years. It’s easy to lose confidence, but it’s hard to regain it, Zhou Fangyin, a professor at the Guangdong Research Institute for International Strategies, told the Global Times on Monday.
“The rise in foreign investor confidence is the result of the introduction and implementation of a large number of policies by China in the past year that have exceeded general expectations, allowing global companies to see the Chinese government’s determination to improve the business and investment environment,” Zhou said.
Since 2023, the FDICI report has had a separate ranking of emerging markets aimed at giving corporate leaders an idea of which emerging markets are most attractive to investors.
China ranks first among emerging markets. Along with China, the United Arab Emirates, Saudi Arabia, India, Brazil, Mexico, Poland and Argentina make up the top eight positions, and they are the only emerging markets included in the 2024 global ranking, as seen in the FDICI report.
With the trend of globalization, the Chinese market’s attraction to foreign investment is inevitable, Wang Yiwei, a professor at the School of International Relations at Renmin University of China, told the Global Times on Monday.
According to statistics from China’s Ministry of Commerce (MOFCOM), the actual use of foreign capital in the first two months of 2024 was the third highest in nearly 10 years. The number of new foreign-invested enterprises totaled 7,160 in the same period, up 34.9% year-on-year, the highest level in nearly five years.
These statistics show that multinational companies are still optimistic about the development opportunities of the Chinese market and will continue to invest in China.
“China is an emerging market that is in transition. The new energy car sector, for example, is leading the world. Many foreign companies have noticed that if they want to achieve green digital transformation, they need to be highly integrated with the China market,” Wang noted.
In January and February, the actual use of foreign capital in high-tech industries reached 71.44 billion yuan ($9.9 billion), accounting for 33.2 percent of China’s actual use of foreign capital, up 1.2 percentage points from 2023. , according to MOFCOM.
The actual use of foreign capital in high-tech manufacturing was 28.27 billion yuan, up 10.1% year-on-year. This fully testifies to China’s continuous high-quality economic development, as foreign investment in China is also undergoing constant transformation and upgrading, MOFCOM said in late March.
