NIPSEA Group in Singapore invested CNY 550 million in the solid waste treatment project in Lankao, Kaifeng; Hefei has become one of the largest manufacturing bases for Corning in the United States, a global leading innovator in material science and technology; and SMC in Japan will invest USD 100 million in Changzhou High-tech Zone for Phase I, to build a base in East China that integrates production, research, development and sales of high-end pneumatic components ... China’s inland is becoming a hot place for foreign capital.
The data of the Ministry of Commerce shows that from January to June in 2021, the actual utilized foreign capital in eastern, central and western China increased by 29.7%, 33.6% and 6.1% respectively; and in the first three quarters of this year, the actual utilized foreign capital in the above three regions increased by 19.8%, 29% and 4.1% respectively.
The data has clearly shown that central China is at a fast track to attracting foreign capital. For example, Henan Province saw a total of 150 foreign-funded enterprises newly established and USD 10.83 billion actually utilized foreign capital in the first half of this year, up 8% year-on-year; and there are 304 newly established foreign-invested enterprises in Jiangxi Province, an increase of 37.56%.
“Facilitated by the dual impetus of the Strategy for the rise of central China and the development of the Belt and Road Initiative, the business environment in central China is gradually improving. As the Chinese government positions central China as a base for developing modern equipment manufacturing and high-tech industries, central China is promoting high-quality and dual circulation development by accelerating the absorption and utilization of foreign capital and undertaking the industries transferred from eastern China.” said Zhang Jianping, Director of the China Center for Regional Economic Cooperation, Chinese Academy of International Trade and Economic Cooperation under Ministry of Commerce. He pointed out that the economic growth potential in central China has been released, as demonstrated by the higher GDP growth rate than eastern China. Thus, foreign investors expect faster development in central China. Central China has comparative advantages in relation to eastern China in the price of factors of production such as labor, land and energy, conducive to the attraction and utilization of foreign capital.
Professor Sang Baichuan, President of the Institute of International Economy, University of International Business and Economics, explained why central China has become the fastest-growing region in foreign capital attraction. He said that the business environment in some central economic zones in central China has been continuously optimized, regional economic growth poles with relatively strong industry supporting capacity have grown out of the process of undertaking the transferred industries. He also stressed the abundant human resources and talent reserves. Those favorable factors are attracting into central China some large-scale projects funded by foreign investment.
Central China is making more significant achievements in opening up. Can western China learn from central China?
In Zhang Jianping’s view, the governments in western China should first be open-minded, change the mindset, reshape their relationship with enterprises, and take more measures to serve enterprises. In terms of business environment, governments should not only improve the hardware infrastructure, but also reform the management system and mechanism in line with the requirements of the new round of reform and opening up, to facilitate the opening up based on rules and standards, and create a better business environment that assures foreign investors of sound business operation.
Sang Baichuan believes that western China should give priority to building a new platform for attracting foreign capital, and create a sound business environment and an investment environment that supports, benefits and is favorable to business; promote the reform in administrative management system, cut the number of items that need administrative examination and approval, raise administrative efficiency, and establish a social consensus on actively attracting foreign investment.
Zhang Jianping said that western China has great potential in absorbing and utilizing foreign capital. On the one hand, the scale of foreign capital in the past was relatively small; and on the other hand, the potential of western China is continuously being released by opening up, development, and business environment improvement. “A typical example is that Shaanxi has secured a chip investment at tens of billions of dollars from Samsung. The cities in western China such as Xi’an, Chengdu and Chongqing will be more attractive to foreign investors in the future.”
As the Belt and Road Initiative is advancing, western China is moving from inland to the forefront of opening up. China now is paying more attention to transferring industries to central and western China when attracting foreign capital, so how can western China improve the ability in undertaking the transferred industries, and thereby enhance the ability in absorbing and utilizing foreign capital?
“Most provinces in western China are border provinces, and thus can easily connect with neighboring countries and regions.” Sang Baichuan said. He stated that western China should give full play to its own advantages, and develop a sound environment for foreign investors based on the border economic cooperation zones, the key development and opening-up pilot zones, and the preferential policies for foreign capital utilization in central and western China. Sang Baichuan also stressed that building upon the advantages of local industries and resources, western China should develop industrial clusters featuring local characteristics to facilitate the agglomeration of foreign investment, bring its development in line with the Belt and Road Initiative, and take the attraction of foreign capital from neighboring countries and the enhanced economic ties with neighboring countries as a priority in opening up.
Zhang Jianping suggested that western China should speed up the implementation of the Foreign Investment Law, and improve local regulations on foreign capital utilization, to build a transparent and international business environment by rule of law; continue to make greater efforts in infrastructure construction such as water, power and gas supply; develop an integrated and seamless transportation system; enhance the awareness of service, and provide the management and services targeted at different industries, to enhance the efficiency and ability of the government in serving enterprises.
Zhang Jianping said that the pilot free trade zones, as the platforms that open up most to the outside, are highly attractive in the new round of agglomeration of high value-added manufacturing and service industries. Therefore, the pilot free trade zones in Shaanxi, Sichuan, Chongqing and Yunnan will become favorable platforms for absorbing and utilizing foreign capital.
“Border provinces in western China should be down-to-earth instead of aiming too high in foreign capital utilization.” Sang Baichuan said. He stressed that western China should attract foreign capital based on local economic situations and structures, make full use of the local advantages in resources in the process of agricultural industrialization, and create a sound institutional environment to ensure stable return for foreign investors.
(Source: CCPIT / chinatradenews.com.cn)
Zhang Yongming Chairman ...
Promoting international trade, promoting utilization of foreign investment, prom...
CCPIT Beijing, a foreign economic and trade organization composed of representat...