Red Star News: 

China has absorbed 1,149.36 billion yuan in foreign investment in 2021, realizing a double-digit growth. What are the reasons behind this achievement?

Chen Chunjiang:

Thank you for your question. 2021 saw China's first breakthrough in absorbing foreign investment to exceed one trillion yuan, up 14.9% to reach 1,149.36 billion yuan, which equals $173.48 billion, up 20.2%; the average two-year growth was 12.1% compared with 2019, 6.4 percentage points higher than the global average. We attribute such achievements to the following five reasons:

First, the effect of China's opening-up is gradually emerging. China has been committed to opening its door wider to the world, further shortening the negative list for foreign investment, fully lifting foreign equity caps in the automotive industry and clearing barriers for the manufacturing industry in pilot free-trade zones. We have also ensured that the RCEP came into effect as scheduled, officially applied to join CPTPP and DEPA and continuously released active signals. Therefore, more foreign investors have seen more market opportunities and have intensified their investment in China – with 48,000 new enterprises being established in 2021, up 23.5% year-on-year. 

Second, the effect of stabilizing foreign investment is continuously emerging. The MOFCOM has acted with firm resolve to implement requirements made by General Secretary Xi Jinping on stabilizing the overall performance of foreign trade and foreign investment, and promulgated 22 supportive measures on stabilizing foreign investment under new development paradigm in 2021. It has also guided local authorities in issuing more than 140 policies and documents. FDI in eastern, central and western China achieved an all-round growth, increasing by 14.6%, 20.5% and 14.2% respectively, and 20 provinces registered double-digit growth, offering significant support for the stability of foreign investment nationwide.

Third, the driving effects of open platforms are increasingly demonstrated. Investment liberalization and facilitation measures on opening platforms such as free-trade zones, free-trade ports and pilot demonstrations for open services have been released and are attractive investment projects. In 2021, foreign investment rose 19% across 21 pilot free-trade zones, while Hainan Free Trade Port doubled its previous figure in foreign investment. The "1+4" open and comprehensive demonstration zones in service sectors, namely, Beijing, Tianjin, Shanghai, Hainan and Chongqing, account for 33.4% of the national total in foreign investment, exemplifying these high-level opening platforms' strong attraction for foreign investment.

Fourth, efforts in stabilizing market expectations are beginning to show results. A special working group for major foreign projects under the coordination mechanism of foreign trade and investment has strengthened their services for major foreign enterprises, including hosting 75 exchange activities for foreign enterprises, chambers of commerce and associations over the course of the year, guiding local authorities in launching over 1,800 dialogues as well as communicating with more than 40,000 foreign businesses, thus making their policies known to the public and promptly responding to concerns from the enterprises. We have coordinated and resolved more than 1,000 difficulties concerning foreign employees' entry, customs clearance for goods as well as vaccinations for staff members. All these efforts have effectively stabilized the operations of these foreign enterprises. Relevant departments actively released policies and measures targeting some common issues, such as extending preferential individual income tax policies on foreign staff and drafting measures to safeguard foreign businesses' equal access to government procurement. The foreign enterprises had more confidence in market expectations and investments when they truly felt that the Chinese government welcomes foreign investment. A recent survey conducted by the MOFCOM showed that 94.9% of enterprises are optimistic about their future business, among more than 3,000 major foreign companies surveyed.

Fifth, efforts to create a better business environment are paying off. All local authorities and departments have ramped up efforts to sort out laws, regulations, and documents, not in line with the Foreign Investment Law. More than 500 laws, regulations, and documents have been formulated, revised, and repealed. In addition, the MOFCOM has improved the complaint mechanism and related working network for foreign-invested enterprises (FIEs) and helped FIEs coordinate and settle a series of complaint matters, thus protecting the legitimate rights of foreign investment. We continue to foster a business environment based on market principles, governed by law, and up to international standards, to ensure that FIEs can access our market, gain a foothold here and thrive. 

We have successfully completed the tasks of ensuring stable foreign investment in 2021. Generally speaking, this progress is the result of the strong leadership of the CPC Central Committee with Comrade Xi Jinping at the core and the joint efforts of all local authorities and all departments. Next, we will firmly implement the arrangements of the CPC Central Committee and the State Council for ensuring stability on the six fronts and maintaining security in the six areas. We will make stability our priority and pursue stable performance while making new progress. Solid measures will be taken to ensure stable foreign investment in 2022, aiming to greet the gathering of the 20th National Congress of the CPC with outstanding achievements. 

These are my answers. Thank you!