QNA & Agencies
Beijing
China’s Ministry of Commerce reported the establishment of 59,080 new foreign-funded companies in 2024, reflecting a 9.9 percent increase compared to the previous year. This growth underscores China’s appeal as a hub for foreign enterprises despite challenges in the global economicenvironment.
However, total foreign direct investment (FDI) in the country experienced a notable decline, dropping 27.1 percent year-on-year to 826.25 billion yuan (approximately$114.76 billion).
The ministry’s statement revealed significant sectoral trends in FDI. While the manufacturing sector attracted 221.21 billion yuan in investments, the services sector continued to dominate with 584.56 billion yuan. Notably, high-tech manufacturing emerged as a key area of interest, securing 96.29 billion yuan—accounting for 11.7 percent of total FDI inflows.
China’s high-tech manufacturing sector witnessed considerable growth, with specialized areas such as medical equipment manufacturing leading the charge. Investment in medical equipment manufacturing surged by a staggering 98.7 percent, reflecting the global demand for healthcare innovation and China’s competitive edge in this domain.
The computer and office equipment manufacturing sector also saw a robust increase of 21.9 percent, indicating sustained interest in China’s capabilities in advanced technology production. Additionally, the professional and technical services sector recorded a 40.8 percent growth in FDI, highlighting the diversification of investments beyond traditional manufacturing.
The report also shed light on the sources of foreign investments. Spain emerged as the fastest-growing investor, recording an impressive 130.8 percent increase in FDI. Singapore followed with a 10.8 percent rise, and Germany registered a modest 2.2 percent growth. These figures underscore the varied global interest in China’s market, driven by its vast consumer base, skilled workforce, and ongoing economic reforms.
The decline in overall FDI, despite the increase in the number of foreign companies, indicates potential challenges. These may include shifts in global investment trends, geopolitical tensions, and economic restructuring within China. The reduction in actual FDI inflows also suggests that while more companies are entering the market, their average investment size might be smaller compared to previous years.
China’s emphasis on high-tech and specialized sectors aligns with its broader strategy to move up the value chain and reduce reliance on traditional manufacturing. The surge in investments in medical equipment and professional services reflects this strategic shift and positions China as a leader in innovative industries.
China remains a key destination for foreign investment, supported by policies aimed at improving the business environment, such as enhanced intellectual property protections and streamlined approval processes for foreign enterprises. As the global economy continues to evolve, China’s ability to attract and retain foreign investors will be pivotal in maintaining its position as a global economic powerhouse.
The rise in the number of foreign companies, coupled with targeted sectoral investments, underscores China’s resilience and adaptability. However, addressing the decline in overall FDI will require concerted efforts to ensure sustained growth and stability in the years to come.