China Vows Better Business Environment for Foreign Investors

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Jan. 21 – At a China Association of Enterprises with Foreign Investment (CAEFI) meeting held on January 14, Chen Deming, China’s Commerce Minister and the president of CAEFI, pointed out that there is great development potential in the country’s environmental protection industry, ecological industry, and in small and medium-sized town construction, all of which will help generate new business opportunities for foreign investors.

According to Chen, the economic outlook for China in 2013 is generally positive – domestic consumption and investment will maintain steady growth levels, and the scale of FDI into the country in 2013 is likely to maintain the same levels seen in 2012 despite some uncertainties.

FDI into China fell by 3.7 percent in 2012 from a year earlier to US$111.7 billion, the first drop since the 2009 Global Financial Crisis.

Specifically, FDI inflows to the country’s manufacturing industry decreased by 6.2 percent to US$48.9 billion, which is partially due to rising operational costs in the mainland. Some foreign companies in China involved in labor-intensive industries have already begun to look for opportunities in cheaper emerging economies, such as Indonesia, Thailand and Vietnam.

Shen Danyang, spokesman for China’s Ministry of Commerce, admitted that some manufacturing companies are moving out of the country, but not in a big way, and many international companies still remain upbeat about China. However, he acknowledged that China needs to try harder to attract foreign investors.

Chen promised that the Chinese government will continue to improve its investment environment and encourage foreign investors to invest in the country. This will be accomplished, in part, through introducing measures that offer greater IPR protection and help promote the use of legal software.

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