In the first half this year, China has utilized foreign capital of 402.5 billion yuan, up 8% year on year, much higher than the 2.2% growth the same period last year. Upon estimation, the actual foreign capital utilization of China will reach $125 billion in 2015, up 4% than that in 2014. Meanwhile, China’s foreign capital utilization structure is optimized, reflecting in the following aspects: first, the proportion of service industry invested by foreign funds rapidly increases, nearly accounting for 63% of the total foreign investment. The reason for the rapid growth is that the measures we actively launched to expand the opening-up of service industry attract foreign capital. Second, as for the foreign investment to manufacturing, the labor-intensive manufacturing sees the decrease of foreign investment, but the high-end manufacturing, including communication equipment, chemical reagents and electronic devices manufacturing industries, makes rapid progress in absorbing foreign investment. Third, the number of M&A projects in China of multinationals rises quickly in comparison with that in last year. The foreign investment in the mode of M&A accounts for 19% of the total this year, and it was only 5% last year.

 

Another delightful change is the rapid growth of multinationals’ investment to China’s R&D centers. For instance, in the first half, foreign investment in R&D reached $2.57 billion, up 62.8% year on year. Why do they invest in R&D centers? Because they have confidence in Chinese market, Chinese labor quality and the high R&D ability of Chinese college students. The R&D centers can meet the demands of not only Chinese products and market but also their global markets.

 

Source: Excerpts of www.comnews.cn, July 21, 2015