The CCP’s deception fails and foreign direct investment worsens – The Epoch Times

[The Epoch Times, November 18, 2023](Comprehensive report by Epoch Times reporter Zhang Ting) Data released by the Communist Party of China on Friday (November 17) showed that in the first 10 months of this year, China’s inbound foreign direct investment further declined. deterioration. This shows that despite the Chinese Communist Party’s propaganda of a more open business environment, it is still difficult to attract foreign investment.

According to data released by the Ministry of Commerce of the Communist Party of China, calculated in RMB, the actual amount of foreign capital used from January to October was RMB 987.01 billion, a year-on-year decrease of 9.4%. It was also the fifth consecutive month of decline, and the decline further expanded. The actual amount of foreign capital used from January to September fell by 8.4% year-on-year.

In recent months, the Communist Party of China has tried to project an image friendly to foreign companies and lured foreign investment back to China with various promises. In August, for example, Beijing launched a comprehensive plan to ease foreign investors’ concerns about doing business in China, promising better tax treatment for overseas companies and making it easier for them to obtain visas. But the increasingly serious decline in foreign investment shows that foreign businesses are no longer easily swayed by the CCP’s promises.

The CCP’s promises are hollow to businesses, and foreign business groups have experienced “promise fatigue” with the CCP and are skeptical that Beijing will provide meaningful support policies.

Jens Eskelund, chairman of the European Union Chamber of Commerce in China (EUCCC), warned the CCP in August this year that foreign companies in China were experiencing “promise fatigue.” He said that the European Chamber of Commerce has not yet seen signs that the Chinese government is willing to implement structural reforms to solve the fundamental challenges facing the Chinese economy and allow foreign and private enterprises to fulfill their potential to support the Chinese economy.

In addition to “commitment fatigue”, foreign businesses also have incentives to repatriate earnings due to the wide interest rate gap between China and the United States, which may prompt them to seek higher returns elsewhere.

Goldman Sachs said that with interest rates in China moving “lower for a longer period” and interest rates outside China moving “higher for a longer period”, capital outflow pressures are likely to persist.

Bloomberg said that analysts believe that the data released by the Ministry of Commerce of the Communist Party of China on Friday does not include the reinvestment income of existing foreign enterprises and is less volatile than the “Direct Investment Liabilities” data released by the State Administration of Foreign Exchange of the Communist Party of China. .

“Direct investment liabilities” is an indicator of foreign direct investment in China. Earlier this month, data released by the State Administration of Foreign Exchange of the Communist Party of China showed that in the third quarter of this year, “direct investment liabilities” experienced a deficit of US$11.8 billion, the first time since records began in 1998 that a negative value has occurred.

Since the beginning of this year, the CCP has been vigorously promoting the protection of the business environment, but on the other hand it has stepped up its suppression of foreign companies in China. It has raided the offices of many foreign companies across China and arrested foreign employees, which has discouraged foreign investors from investing in China.

U.S. Commerce Secretary Gina Raimondo warned the CCP in September that U.S. companies were losing patience and might do business in other countries if the situation did not improve. Raimondo also said that during her visit to China, she conveyed a message to the CCP—actions speak louder than words.

Editor in charge: Lin Yan#