Foreign firms 'still buoyant about China'

Officials say service, high-tech sectors targeted amid increase in FDI which rose 6.4% in 2015

Foreign companies remain keen to invest in China's service and high-tech industries to maintain robust growth, Ministry of Commerce officials said on Jan 25.

Foreign media have reported that multinationals such as Microsoft, Panasonic and Sharp may withdraw from China to concentrate on their home bases or emerging markets. However, the ministry dismissed such claims.

"Foreign companies have discovered that market demand in China is changing as consumers and companies want to buy more high-value-added products, and that there is surging demand for the service industry in the country," said Huang Feng, deputy director-general of foreign investment administration for the ministry.

He said multinationals are keen to invest in healthcare, environmental protection, pharmaceuticals, communication and information services in China, and also in high-tech industries that are being developed more slowly than the overall pace of development.

Foreign direct investment in China rose 6.4 percent year-on-year to $126.27 billion in 2015, according to ministry data.

Foreign investment in the service industry rose 17.3 percent, accounting for 61.1 percent of the flow.

Wan Lianpo, deputy director-general of trade in services and commercial services for the ministry, said, "Major global firms are still optimistic about the Chinese market and investment prospects after assessing the market potential of other global economies."

Multinationals such as Syngenta, Volkswagen, Lufthansa, Samsung, Air Liquide, Bridgestone and Intel made substantial investments in China's service, manufacturing and agricultural sectors in 2015.

Coffee chain Starbucks also plans to open 500 stores this year in China, its largest market outside of the United States. It aims to create 10,000 jobs a year up to 2019.

Uber, the ride-hailing company based in the US, has committed to invest 6.3 billion yuan ($1 billion) in China to diversify its business, which ranges from transportation services to automotive financing.

Li Jian, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, said although some multinationals had complained about the changing investment environment in China, they should get used to the new market development model.

China is optimizing its industrial structure amid the new normal - a phrase introduced by President Xi Jinping to describe growth that is slower but of better quality.

wuyiyao@chinadaily.com.cn

(China Daily European Weekly 01/29/2016 page3)