According to the latest data released by the Ministry of Commerce, from January to February 2021, China actually used 176.76 billion yuan of foreign investment, up 31.5 percent year on year. In the same period of last year, due to the dual influence of COVID-19 epidemic and the Spring Festival holiday, enterprises stopped production on a large scale and investment activities were limited. The actual utilized foreign capital in China was 134.4 billion yuan, down 8.6% year-on-year. Two contrast, the change is not small, how to treat this rare in recent years "eye-catching" increase?

"There are two main reasons for the large increase in foreign investment in the first two months of 2021." Nie Pingxiang, a researcher with the Academy of International Trade and Economic Cooperation under the Ministry of Commerce, said that, on the one hand, January to February 2020 was a severe epidemic period in China, which led to a large drop in the actual use of foreign investment. "The low base of the same period last year led to a sharp increase in foreign investment in China from January to February this year." On the other hand, in the context of the severe impact of the epidemic on the global economy in 2020, China will take the lead in controlling the epidemic and resuming work and production. It will be the only major economy in the world to maintain positive economic growth and become a safe haven for multinational companies. China's economic growth will continue to improve in 2021, and China's attraction to foreign investment will be further strengthened in the context that the epidemic in major countries has not been completely controlled. This enhancement is reflected in the data of different statistical calibers.

In terms of industry, the service industry actually utilized 141.74 billion yuan of foreign capital, up 48.7% year on year, accounting for 80.2% of the country's actually utilized foreign capital. Among them, wholesale and retail, accommodation and catering, rental and business services grew by 54.1 percent, 45.6 percent and 70.3 percent respectively. In terms of origin, the actual investment of countries along the "One Belt And One Road" route, ASEAN and EU increased by 26.2%, 28.1% and 31.5% respectively. In terms of regional distribution, foreign investment in the eastern, central and western regions of China increased by 32.3%, 11.1% and 50.9%, respectively.

If you compare the data from January to February of this year with the pre-outbreak trend, you can see more changes and features. According to Nie Pingxiang, the first reason is that the proportion of foreign investment in the service industry continues to increase, especially the wholesale and retail, accommodation and catering, rental business, which are affected by the epidemic and closely related to consumer consumption, showing a retaliatory growth, thanks to the opening of China's service industry and the introduction of relevant measures to promote consumption. Secondly, the growth rate of foreign investment in the western region is much higher than that in the eastern region. This shows that in the process of forming a new development pattern, the advantages and potential of attracting foreign investment in the central and western regions are being constantly tapped. In addition, investment in China from countries along the "One Belt And One Road" route, ASEAN, EU and other economies has increased significantly, which shows that China's economic and trade relations with relevant countries have become closer.

China will open its door wider to the outside world in 2020, and the number of items on the negative list for foreign investment access in the national version and the pilot free trade zone version will continue to shrink. Meanwhile, the 2020 edition of the Catalogue of Industries Encouraged Foreign Investment has 127 more entries than the 2019 edition. On the one hand, we can see that China has been sending positive signals to attract foreign investment, which has enabled China's actual utilization of foreign investment to achieve substantial growth against the background of shrinking global investment.

Looking into the prospect of attracting foreign investment this year, experts said that China will have an optimistic outlook in 2021 despite the complex and grim external situation. The main reason is that 2021 is the first year of the 14th Five-Year Plan. China will further accelerate the construction of a new development pattern featuring domestic cycles as the main body and mutually reinforcing domestic and international cycles. China will continue to deepen the reform of institutions and mechanisms in various fields, strengthen the institutional opening up, and constantly optimize the business environment, so as to provide more opportunities for foreign investors to participate in China's development and share the opportunities of China's opening up of the big market and development, so as to maintain its attraction to foreign investors.

Source: State-owned Assets and Administration Commission of the State Council