China’s FDI +45% Feb 2022

Based on the latest data disclosed by the Ministry of Commerce on 14 March 2022, the inflow of foreign direct investments in China in the first two months of the year topped USD 38 billion, surging by 45% in USD terms compared to the same period last year. China also became a top choice for foreign investors for establishing global R&D centres, regional headquarters and supply-chain operations over the past years. In the first two months of 2022, the increase of foreign capital in high-tech industries hit 74%.

Despite the pandemic, foreign investors have not slowed down the pace of entering the Chinese economy, attracted not only by the vast domestic market and the economic growth (GDP grew by 8.1% in 2021, and is expected to increase by 5.5% in 2022, according to the report delivered by the State Council to National People’s Congress on 5 March 2022), but also by incentives, preferential tax policies, and the establishment of new free trade zones.

In 2020, China surpassed the United States as the largest recipient of FDI, while in 2021, China received a record inflow of FDI, confirming Beijing as a hotspot for foreign investors. Over the past years, China constantly reduced and revised the number of business activities in the negative lists for foreign investments, addressing capital and resources into advanced manufacturing, modern sectors, emerging technologies, digital economy, and low-carbon projects.

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