Investment Catalyst
An exhibitor demonstrates his company’s robot at the CIFIT WEI PEIQUANOn the first floor of Xiamen International Conference and Exhibition Center, a staff member from Mali’s Investment Promotion Agency was busy setting up a booth. Publicity posters were hung all over the walls of the small area so that Chinese investors can easily identify the fields available for investment in the country. The scene took place during the 20th China International Fair for Investment and Trade (CIFIT) held on September 8-11 in Xiamen in southeast China’s Fujian Province.
Awa Bagayoko worked nimbly with confidence and optimism. “It’s my first time to China to promote investment opportunities in Mali. Apart from infrastructure, we hope Chinese companies can also increase investment in agriculture, such as cotton processing. Mali welcomes foreign investors and offers many preferential policies to facilitate investment,” she told ChinAfrica.
The 20th CIFIT attracted participants from nearly 50 countries and regions, who crowded into the center and exchanged investment information with the same type of expectations as Bagayoko.
CIFIT, which aims to increase foreign investment into and outbound investment from China, is the only international investment promotion event for twoway investment in China, as well as the largest investment exhibition in the world recognized by the Global Association of the Exhibition Industry.
With 2018 marking the 40th anniversary of China’s reform and opening up, China has steadily kept up with the process and continuously optimized its investment environment, making remarkable achievements in promoting foreign investment and outbound investment.
Official data showed that China had attracted nearly $2.1 trillion of foreign direct investment (FDI) by the end of July, with foreign-invested enterprises (FIE) contributing 10 percent of jobs in cities and towns, 20 percent of fiscal revenue and nearly half the value of imports and exports. Chinese outbound investment has also climbed to $1.88 trillion, with investment to Belt and Road countries reaching more than $80 billion over the past five years.
“FDI into and outbound direct investment from China has not only promoted continuous growth of the China’s economy, but has also made significant contributions to the world economy,” said Wang Shouwen, Vice Minister of Commerce of China, at the 2018 International Investment Forum during the CIFIT.
Attracting investment
According to 2018 Report on Foreign Investment at China released at the 20th CIFIT, in the initial stage of China’s reform and opening up, only 300 FIEs were approved annually, with an annual investment of nearly $600 million. In 1984, the number of new FIEs exceeded 1,000. By the end of 2017, the number of such enterprises reached nearly 900,000.
China has ranked first among developing countries in the utilization of foreign investment for 26 consecutive years. Moreover, in the first seven months of 2018, China attracted $76.1 billion in FDI, an increase of 5.5 percent year on year.
China has continuously lowered market entrance threshold by implementing the pre-establishment national treatment and a negative list. The State Council Information Office released several measures on June 8 with the goal of utilizing foreign investment effectively to promote high-quality economic growth, announcing that pre-establishment national treatment and a negative list will be launched nationwide.
In April, Chinese President Xi Jinping announced at the Boao Forum for Asia Annual Conference China’s major measures for further opening up and new measures for lowering the market entrance threshold by a large margin and creating a more attractive investment environment, vowing that China will not stop opening up but will only open wider.
Global outreach
African countries were invited to pursue global investment at the CIFIT. Officials from the investment sector in Ethiopia, Kenya, Mozambique and Zambia took the opportunity to hold investment promotional events to introduce Africa’s development advantages, and its potential in terms of its rich natural resources, great market opportunities and an abundant young labor force, to global merchants.
Official data showed that Chinese companies’ investment in Africa totaled $3.1 billion in 2017, increasing by nearly 40-fold over 2003. Chinese investment in Africa has also gradually expanded to cover architecture, mining, manufacturing, technology, geological exploration, real estate, finance, wholesale and retail as well as agriculture sectors. By the end of 2017, Chinese investment in Africa had exceeded $100 billion, covering most African countries. Besides state-owned enterprises, Chinese private enterprises have also invested in Africa with quicker pace, gradually becoming major investors in African countries.
During the Forum on China- Africa Cooperation Beijing Summit, Xi stressed that the Belt and Road Initiative should be aligned with development strategies of African countries. Guracha A. Bidu, a representative of the Kenya Investment Authority agreed. “Kenya welcomes investment that’s in line with our country’s national conditions. As one of the targeted countries of the Partnership and Investment for Growth in Africa project, Kenya hopes to attract Chinese investment in more fields,” Bidu told ChinAfrica.
The Association of Southeast Asian Nations (ASEAN) is now the third largest trading partner of China, while China is its largest trading partner. Moreover, within China’s three largest trading partners - the United States, the European Union and ASEAN - the trade between China and ASEAN has seen the fastest growth.
“In the trade and bilateral investment between China and Belt and Road countries, China-ASEAN trade and investment ranks first,” said Xu Ningning, Executive Director of the China-ASEAN Business Council.
Statistics show that China-ASEAN trade grew by 18.6 percent in the first half of 2018. Last year, trade value between the two parties exceeded $500 billion, with bilateral investment reaching $200 billion.
“ASEAN countries are strongly complementary with China with various trade and investment options. Capacity cooperation is a significant part of the cooperation and also our priority,” said Xu.
Both China and ASEAN countries are actively promoting industrial upgrading to propel economic growth through industrial restructuring. In 2016, the two parties signed a joint statement on capacity cooperation.
“Capacity cooperation can promote China’s industrial restructuring and regional industrial upgrading and enable the country to cope with new changes brought on by China-U.S. trade tensions,” said Xu.
In terms of promoting China-ASEAN industrial cooperation, Xu pointed out that relevant authorities need to make respective industrial policies and plans more integrated and better coordinated.
“CIFIT serves as a bridge for China to improve cooperation with the rest of the world for common development and constitutes an important gateway for China’s opening up,” said Wang. CA
**Reporting from Xiamen, Fujian Province
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$80 bln China’s investment to Belt and Road countries over the past five years
$76.1bln FDI China attracted from Jan.-July of 2018
$3.1 bln Chinese companies’ investment in Africa in 2017, increasing by nearly 40-fold over 2003