Investors' confidence

(China Daily)
Updated: 2010-03-29 07:52
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The steady growth of foreign direct investment into China should say a great deal about the attractiveness of the rapidly growing Chinese economy.

But if there is a significant rise in the proportion of foreign businesses that feels they are increasingly unwelcome in China's market, it might be more about the change of investors' perception rather than China's opening up policy.

A recent survey by the American Chamber of Commerce in China showed that the proportion of US businesses that feels unwelcome to participate and compete in China's market rose to 38 percent in February, up from 26 percent only two months before. It's the largest increase since the survey started four years ago.

The result happened to come amid intensifying US accusations that China has manipulated its currency to subsidize its exports as well as several headline-making news involving multinational companies in China.

Together, they seem to give the impression that China is shutting the door to foreign investors.

But this is neither what Chinese policymakers are advocating nor what China's FDI growth indicates.

Last Monday, Premier Wen Jiabao made clear to a group of global business leaders and economists that the country remains open for international business and investment.

Last month, China's FDI rose for the seventh consecutive month in a row. And the worst global recession in decades has only reduced China's intake of FDI by 2.6 percent year on year in 2009.

Fierce competition in the Chinese market that has been considerably broadened may have given rise to the frustration of some multinational companies. But that is a far cry from a closing door.

China's change in growth model will actually provide foreign businesses with more opportunities that, albeit, also allure more competitors from home and abroad.

(China Daily 03/29/2010 page8)