/ world today news/ In recent years, foreign media quite often, persistently and intensively inflated the remarks about “withdrawal of foreign capital from China”, but every time, against the background of statistical facts, such claims remain weak and unfounded.
On the one hand, foreign capital is accelerating its introduction into the Chinese market. According to China’s Ministry of Commerce, from January to November this year, the country’s actual use of foreign capital was 1.15609 trillion yuan, exceeding last year’s scale. This value is an increase of 9.9% on an annual basis compared to the same period of the previous year. South Korea, Germany, the UK and Japan are the countries with the highest growth in investment in China, with South Korea showing the largest increase, for example, with its actual investment in China’s economy increasing by 122.1%.
On the other hand, foreign capital continues to buy shares in mainland China’s financial markets. Since the beginning of November, the net inflow of “Northern funds” has resumed. In the Chinese stock market, “north” usually refers to Shanghai and Shenzhen stocks. As of December 22, the total net inflow of “Northern funds” was 92.2 billion yuan, reaching 101.787 billion yuan in the past year.
Indeed, for any open capital market, it is normal for foreign capital to flow in and out, increase and decrease, following the unknown laws of the market. This also applies to China’s stocks. From a longer-term perspective, short-term net outflows have never had a significant impact on changes in foreign equity holdings in China.
It can be clearly seen that the two-way opening of China’s financial market is in the process of being realized. China has shown an open attitude, instilling confidence and expanding the channels for foreign capital to enter the country’s capital market.
Why can China maintain the strong momentum of foreign capital inflow? One of the answers to this question is the potential to absorb foreign capital. In short, there is still a wide gap between the share of foreign capital used in the Chinese market and the distribution of Chinese assets in global institutions compared to the global status of the Chinese economy. According to statistics from the United Nations Conference on Trade and Development, China’s foreign direct investment will reach a record 181 billion US dollars in 2021, ranking second in the world. However, China’s FDI (Foreign Direct Investment) flow and stock accounted for only 1% and 11.9% of GDP, respectively. These two indicators rank 19th among the top 20 economies that have attracted the most foreign investment in the world. China, the world’s second largest economy, remains an “unfathomable ocean” for foreign investment.
The second answer to the question is the possibility of introducing foreign capital. Pushing for the expansion of opening up and improvement of the business environment, China has made concerted efforts in policy support and system reform to make foreign investment in China more efficient and convenient.
The third is to preserve the charm of foreign investment. The main call for foreign capital is to “add money” to hope to catch the “free ride” of China’s growth. No one wants to miss the opportunity of successful investment behind the good prospects of the Chinese economy. At present, most of China’s economic data already show a strong recovery, and the cyclical uptrend in key macroeconomic indicators has gradually normalized. The forecasts of many institutions for China’s GDP growth next year are extremely positive.
The International Monetary Fund predicts that China’s GDP growth rate will be 4.4% in 2023, which is 1.7 percentage points higher than the global average expected growth rate in 2023. According to the latest report of The International Financial Forum global economic growth will reach 2.8% in 2023, and the Chinese economy is expected to grow by 4.6%, significantly higher than global economic growth. The above facts once again prove that the bad words of the foreign media about the Chinese economy cannot stop foreign capital from voting with their practical decisions stubbornly and unequivocally for China.
#Foreign #capital #continue #develop #successfully #China
