Foreign Investment In China'S "New Normal"

Manufacturer CITIZEN precision (Guangzhou) Limited has announced that it has closed down recently. Panasonic Corp said it would withdraw two color TV production lines from China, and Microsoft decided to phase out NOKIA's two handset factories in China.

In response to the adjustment of some foreign enterprises' operation in China, there is public opinion that this is a manifestation of "the tide of foreign capital withdrawal".

Is it true? We can not only see the back of the "foreign investment currency" but also examine the positive value of the value.

In 2014, China attracted foreign direct investment of about $128 billion, an increase of about 3% over the same period last year, and became the largest inflow of foreign direct investment.

More importantly, while maintaining a steady growth in total volume, the structure and quality of foreign investment continue to improve.

These data and facts show that China's attractiveness to foreign investment has not diminished. On the contrary, due to structural adjustment and industrial upgrading, China's economy is moving towards a middle and high-end level from the low end level, and the gold content of foreign investment in China has also been increasing.

It can be said that this is a typical example of foreign investment in China entering the "new normal".

In fact, according to the new characteristics of world economic development and the new needs of global business layout, MNCs need to constantly adjust their investment structure, industrial pattern and geographical distribution.

For China, some foreign-funded enterprises "move out" from the low value-added production links, while more foreign enterprises invest in high value-added manufacturing and high-end service industries.

In 2014, China's total economic volume exceeded US $10 trillion for the first time, the market scale expanded unprecedentedly, and the business environment continued to improve. With the continuous progress of structural reform, the trend towards more advanced, more complex and more rational structural development is more obvious, which is more and more attractive to global capital.

"China has a huge market of over 1 billion 300 million people, with an economic scale of over 10 trillion US dollars and an economic growth rate of over 7%."

Zou Dongtao, President of the China Development and Reform Research Institute of Central University of Finance and Economics, said that the huge scale of the market, the high consumption ability and the perfect human resources are the source of attraction for China to attract foreign capital.

The abolition of traditional preferential policies such as rising labor costs, improving environmental standards, and taxation.

At present, the investment in Chinese traditional industries is relatively saturated, and the carrying capacity of the environment has reached or near the upper limit. The policy of super national treatment of foreign investment has changed.

Faced with the trend of pformation and upgrading, private, state-owned and foreign-funded enterprises are actively adjusting to find new opportunities for development.

According to the development and business needs of the host country, multinational corporations take measures such as merger and reorganization in the process of implementing the global strategy, and readjust and layout their global business, which is a normal business activity of the enterprises.

In fact, in recent years, most of the foreign companies moving out of China have been relying on low cost and low added value.

But in the field of high value-added industries such as R & D, marketing and so on, few foreign investors have moved away, instead, they have increased investment.

In 2015, apple, the world's most valuable technology company, opened retail stores in four cities in Zhengzhou, Hangzhou, Chongqing and Tianjin.

With the opening of the Shenyang store in the end of February, the number of Apple retail outlets in mainland China will grow to 17.

"Today's China is a huge and important market for any multinational company," said Angela Arentz, senior vice president of Apple Corp. The biggest challenge in China is how to keep pace with development.

The structure of China's attracting foreign investment is undergoing a deep adjustment, and the proportion of the primary industry and the second industry is declining. In manufacturing, the high-end manufacturing industry such as communication equipment, computers, electronic equipment, pportation equipment and other high-end industries will absorb foreign capital to maintain a good scale, while foreign investment in medical, pension, logistics, pportation and e-commerce services will be expanded.

In 2014, the actual use of foreign capital in China's service sector was about $66 billion 300 million, an increase of 7.8% over the previous year, accounting for about 56%, while the actual use of foreign capital in the traditional manufacturing industry was about $40 billion, down 12.3% from the same period last year.

"China has adjusted the structure of foreign investment in accordance with the policy direction of industrial structure adjustment."

Zhang Hanya, vice president of China Investment Association, said that it is an inevitable trend to eliminate some energy consuming and surplus Industries and attract more foreign capital to invest in hi-tech industries and services.

In addition, China's regional structure attracting foreign investment has also changed.

In 2014, the actual use of foreign capital in the central region increased rapidly, an increase of 7.5% over the same period last year, while the eastern and western regions remained stable, up 1.1% and 1.6% respectively over the same period last year.

Observers pointed out that China's economic development needs high level utilization of foreign capital. In the future, China will rely more on the soft environment of laws, institutions, policies and services, and rely on the expansion of advanced manufacturing and service industries.

China's Ministry of commerce is formulating a national investment promotion strategy in the new era, focusing on strengthening country investment.

Regional investment promotion; study and propose policies and measures to encourage the pformation and upgrading of foreign investment and promote the implementation of innovation driven development strategy, and formulate supportive policies to encourage foreign investment in regional headquarters, R & D centers and other functional organizations.

These are all

China's "dividend call".