China Review News:

We have noted that last year, global cross-border direct investment fell by about 40%, but foreign investment in China registered a trend-bucking rise of 4.5%. This suggests that foreign investors are still optimistic about the Chinese market. What role has foreign investment played in China's efforts to build a moderately prosperous society in all respects? Some foreign-funded enterprises are worried that foreign investment will no longer be needed to foster a new development paradigm. What's MOFCOM's take on this? What other measures will be taken to attract foreign investment? Thank you.

Wang Wentao:

Thank you for your question – I'll answer it. I completely agree with your conclusion that foreign investors are still optimistic about the Chinese market. Your question involves three aspects: first, the role foreign investment plays; second, our view on some foreign investors' concerns; third, what measures should be taken next. I will respond to these three aspects individually.

Here, I'll make a simple evaluation of the role and contributions of foreign investment. China has always been an important destination for foreign investment. Since the 18th CPC National Congress, the overall scale of foreign investment flowing into China has been on the rise and has been the second largest worldwide over the past four years. Especially last year, despite a 40% drop in global foreign investment, foreign investment entering China grew by 4.5%, bucking the declining global trend. This type of investment is not easy to come by. As an important part of China's market entities, foreign-funded enterprises have made unique and significant contributions to the country's economic and social development. Foreign enterprises account for 2% of all market entities in China and have created about 40 million jobs – one-tenth of the employed urban population. Additionally, they have contributed to one-sixth of China's tax revenue and two-fifths of imports and exports. This fully shows that foreign-invested enterprises are important participants in, witnesses, and contributors to China's building of a moderately prosperous society in all respects. While foreign enterprises contribute to China's development, they themselves have also grown well in the country. The Chinese market has become an important and even main source of profit for some multinational companies. According to a survey by foreign chambers of commerce, 56% of U.S. enterprises, 73% of European enterprises, and 89% of Japanese enterprises in China made profits last year despite being affected by the pandemic.

We put forward fostering a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other. Some one-sided interpretation of the paradigm focuses too much on the domestic circulation as the mainstay and worries about the discarding of foreign investment. This is a complete misunderstanding. General Secretary Xi Jinping has stressed many times that a new development pattern is by no means a closed domestic circulation, but a more open dual circulation that allows domestic and overseas markets to reinforce each other. In fact, most foreign enterprises in China are practitioners of dual circulation. Their domestic circulation is "in China and for China." They purchase, produce, and sell in China and are deeply integrated into the country's domestic circulation. At the same time, these companies have contributed two-fifths of China's imports and exports, which have also promoted domestic and international dual circulation.

Next, we will take measures in four aspects: expanding opening-up, strengthening services, safeguarding rights and interests, and improving the business environment.

First, we will open wider. Mr. Wang Shouwen has mentioned this. Just now, I also spoke about how we will further shorten the negative list and accelerate the efforts to formulate the 2021 version of the negative list. By widening the market access and relaxing the restrictions, we will open wider. We have also promoted negotiations on some free trade agreements and actively facilitated and participated in WTO reforms.

Second, we will step up efforts to guarantee services. We have set up special work teams with 20 departments and key provinces to help vital foreign enterprises and projects solve problems. The special teams have been operating normally. The Investment Promotion Agency of the Ministry of Commerce has established a National Center for Complaints of Foreign-Invested Enterprises – their telephone number is 010-64404523. All provinces and cities in the country have agencies for complaints from foreign companies, not only the MOFCOM, which can be checked on the official website of MOFCOM. If foreign enterprises encounter any difficulties or problems, they can solve them through coordination at different levels. This is what it means to "strengthen services."

Third, we will enhance protection of the legitimate rights and interests of foreign investors. We will make good use of the complaint mechanism and better protect their rights and interests in accordance with the law.

Fourth, we will continue to improve the business environment. We will effectively implement the Foreign Investment Law and its implementation regulations, improve the supporting systems, and foster a business environment that is based on market principles governed by law and up to international standards. As General Secretary Xi Jinping has said, China will open its door only wider to the world. We're happy to see that foreign companies invest in China and can share the dividends of China's reform and development. Thank you.

Chen Wenjun:

Thank you, all the speakers. Thank you, friends from the media. That's all for today's press conference.

Translated and edited by Zhang Liying, Wang Wei, Li Xiao, Li Huiru, Wang Yiming, Ma Yujia, Wang Mengru, Zhang Junmian, Cui Can, Yuan Fang, Zhang Rui, Wang Zhiyong, Zhu Bochen, He Shan, Zhang Tingting, Liu Sitong, Qin Qi, Xu Xiaoxuan, Wang Qian, David Ball, Jay Birbeck, Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.