13th FYP foreign investment to reach US$690b

China will achieve a total foreign investment of US$690 billion during the country's 13th Five-Year Plan, according to an official estimate.

In the period from 2016 to 2020, major achievements were made in deepening reform in an all-around way and opening China wider to the outside world, said Zong Changqing, director of the foreign investment department at the Ministry of Commerce.

The scale of foreign capital absorbed maintained steady growth since 2016, Zong said. From 2016 to 2019, China attracted US$549.6 billion in foreign investment, with an average annual increase of 1 percent, while for from 2017 to 2019, China maintained its second position in the world in attracting foreign investment for three consecutive years. 

The ministry said it is estimated that the total amount of foreign investment in the period of the 13th plan will reach US$690 billion , and the average annual amount of investment will expand by more than US$10 billion over the 12th Five Year Plan.

China's proportion of cross-border direct investment, meanwhile, also increased significantly, Zong said. In recent years, the total volume of global transnational direct investment had been in an overall decline, falling for three consecutive years from 2016 to 2018. In 2019 it shrank to just three quarters of that in 2015, and the United Nations Conference on Trade and Development expects a further 30 to 40 percent decline in 2020. 

Against the international backdrop of a sharp contraction in cross-border capital flows, China accounted for a greater share of global foreign direct investment, which rose to 9.2 percent last year from the 6.6 percent in 2015 and is expected to extend rises steadily this year, Zong said.

Zong also highlighted the optimized structure of foreign investment in China. From 2016 to 2019, the service sector attracted US$395.6 billion of foreign investment with an average annual increase of 2.2 percent, to account for 73.1 percent of the headline foreign investment in 2019 compared with 69.8 percent in 2015.

In terms of industries, the high tech sector contributed US$129 billion in foreign investment with an annual growth of 23.9 percent on average, accounting for 27.7 percent of the total foreign investment in China last year which was up from 12.2 percent in 2015.

"Foreign capital has made outstanding contributions to China’s economic and social development," Zong said. 

In 2016-2019, foreign invested enterprises (FIEs) posted an overall export volume of US$3.9 trillion, accounting for 41.7 percent of the national total, and had imported goods and services worth US$3.4 trillion in general, accounting for 44.8 percent of the national total.

They also contributed 11.4 trillion yuan in tax revenue, accounting for 19.3 percent of China’s overall tax revenue over the four-year period, and offered jobs for 40 million urban workers. 

"FIEs, with the number only accounting for less than 3 percent of the total number of enterprises in China, have created two-fifths of China’s foreign trade, one-sixth of its tax revenue and nearly one-10th of its urban employment," Zong said. "This indicates that they are playing an irreplaceable role in the development of our country and the construction of a moderately prosperous society in an all-round way.