Coronavirus drags China’s FDI down 8.6% in Jan-Feb

Foreign direct investment (FDI) into China fell 8.6 per cent year on year in the first two months of 2020 amid combined impacts of coronavirus and the extended Chinese New Year holidays, a commerce official said Friday, warning a grim scenario for the rest of the year.

FDI totalled 134.4 billion yuan (about USD 19.2 billion) for January and February, Zong Changqing, director of the foreign investment department under the Ministry of Commerce said.

A breakdown of the data showed FDI inflows climbed 4 per cent year on year in January but plunged 25.6 per cent in February, Zong told a press conference.

Zong warned about a complex and grim FDI situation for the whole year, citing factors such as “a shrinking global FDI cake” and increasing downward pressure on the world economy.

However, Zong expressed confidence over the long term, saying China’s economic fundamentals for sustaining long-term sound development remain unchanged, and the country maintains its edge in industrial chains, talent resources and infrastructure.

“The epidemic will not change the attraction of China’s large and booming market for foreign investment,” he said, state-run Xinhua news agency reported.

Instead of being chilled by the epidemic shock, some multinationals have decided to pick up speed in expanding their presence in China, Zong said.

As the latest evidence, Starbucks announced a plan to build a coffee innovation park in east China’s Jiangsu Province. With an initial investment of USD 130 million. The innovation park is expected to be the largest manufacturing investment by the world’s leading coffee chain outside the United States.

China will make further efforts to widen market access and create an equitable and better business environment for both domestic and foreign-invested enterprises, Premier Li Keqiang said in a congratulatory letter on Friday to the signing ceremony of the coffee innovation park.

Source Article