At the ongoing NPC and CPPCC sessions, the flow of foreign investment has sparked heated discussion among delegates and members.

The "wave of foreign capital withdrawal" is not factual

Philips Lighting closed its Shenzhen factory, and Seagate, the world's largest hard drive manufacturer, pulled out of Suzhou... Since last year, a number of foreign capital withdrawal incidents, combined with changes in the global investment and trade environment, have once again led people to believe that China is experiencing a "wave of foreign capital withdrawal."

"I have heard the talk of a so-called 'wave of foreign capital withdrawal,' but I want to emphasize that this is not factual," Minister of Commerce Zhong Shan said at the recent National Conference on Foreign Investment Work. Facts and data show that China remains a "hot destination" for foreign enterprise investment.

Data show that in 2016, US enterprises' investment in China grew by 52.6%, and that of the EU grew by 41.3%. The latest survey report released by the American Chamber of Commerce in China shows that the proportion of surveyed enterprises taking China as their primary investment destination reached the highest level in five years, with 56% of enterprises listing China as one of the world's top three investment destinations.

"With economic development and changes in industrial structure, it is normal for a country's foreign capital to flow in and out," said Zhang Xiaoji, a member of the National Committee of the CPPCC and former director of the Department of Foreign Economic Research at the Development Research Center of the State Council. Although China's labor costs are no longer as competitive as before, the huge market and the innovation-driven landscape will become the "confidence" behind our attraction of foreign investment in the new era.

Vice Minister of Commerce Wang Shouwen said that continuously improving laws and regulations, growing industrial supporting capacity, and huge market potential will continue to maintain China's competitiveness in attracting foreign investment.

From attracting investment to selecting investment

Last year, faced with a US$150 million German project, the Jiaxing Economic and Technological Development Zone in Zhejiang declined it because the project did not meet environmental capacity standards. "What we focus on now is attracting and selecting investment; all projects must undergo scientific assessment," said Chen Lizhong, a deputy to the National People's Congress and director of the Administrative Committee of the Jiaxing Economic and Technological Development Zone.

"In attracting foreign investment now, the key is to improve quality and select investment more according to our own development needs," said Ou Chengzhong, a deputy to the National People's Congress and chairman of the Tianjin Municipal Committee of the China Democratic National Construction Association.

Accordingly, the "quality" of China's foreign investment is indeed changing. Last year, China's pharmaceutical manufacturing industry absorbed 55.8% more foreign investment, and the high-tech service industry grew by 86.1%. Investment attraction is moving from traditional manufacturing toward "higher" and "newer" sectors.

Chen Lizhong told reporters that more than 60 Fortune Global 500 companies have now invested in Jiaxing, mainly from the United States and Europe, with industries mainly involving high-end equipment manufacturing and biomedicine. In contrast, previously most foreign enterprises there were in chemical fiber textiles, auto parts, and other sectors.

"Increasing efforts to attract foreign investment" was also one of the proposals made by Zong Qinghou, a deputy to the National People's Congress and chairman and general manager of Hangzhou Wahaha Group Co., Ltd., at this year's NPC and CPPCC sessions. He said that China's real economy still has great development potential and great demand for capital and technology, and we can absolutely, from a new starting point, set off a new wave of attracting foreign investment and promote a new round of real economy development.

The most attractive destination

China and the world's environment are changing, but China's policy of utilizing foreign investment will not change, the protection of the lawful rights and interests of foreign-invested enterprises will not change, and the direction of providing better services for enterprises from all countries to invest and do business in China will not change. This is China's solemn commitment to the world.

The Government Work Report also specifically proposed to "vigorously optimize the environment for foreign investment." From cutting taxes and fees to relaxing foreign investment access, from treating domestic and foreign investment equally under Made in China 2025 to accelerating the construction of pilot free trade zones... a series of measures demonstrate that "China's door will open wider and wider, and it will surely continue to be the most attractive destination for foreign investment."

"Foreign investment still plays an irreplaceable and important role in China's development. We must build a more internationally competitive investment environment, consolidate our position as the largest developing country in attracting foreign investment, and strive to become the preferred destination for global foreign investment," said Jiang Zengwei, a member of the National Committee of the CPPCC and chairman of the China Council for the Promotion of International Trade.

The Ministry of Commerce said that next it will continue to reduce restrictions on foreign investment access and encourage more foreign investment in the central and western regions and Northeast China; focus on promoting investment facilitation and accelerate the promotion of experience and practices from pilot free trade zones. At the same time, it will strive to create a fair, transparent, and predictable business environment, fully implement national treatment for foreign-invested enterprises, and ensure fair competition between domestic and foreign enterprises.

"China's door will never close; it will only open wider. We always welcome foreign enterprises to invest in China and are willing to provide them with increasingly better services," Zhong Shan said.