While the global COVID-19 outbreak has plunged many of the world’s economies into deep recession, China, which was the first to face the disease, managed to stop its spread in a timely manner and is already adapting its economy to attract investors as a relatively safe haven.
China’s economy enjoyed an 18.7% increase in the volume of foreign direct investment in August alone, up to 84.1 billion yuan ($12.3 billion), China’s Commerce Ministry has revealed. Investors have been pouring their money into the Asian country for five months in a row, as most of the world remains engulfed in the coronavirus pandemic.
The Commerce Ministry indicated that despite the dire state that countries’ economies wound up in this year, the level of foreign direct investment (FDI) in China has exceeded that of 2019, jumping 2.6% to 619.78 billion yuan ($90.69 billion) between January and August.
Investments in the high-tech service sector showed the greatest growth at 28.2% in the first eight months of 2020, while the service industry came in second with a 12.1% spike compared to the previous year. Seeing the growth in these sectors, Beijing has already announced the implementation of mechanisms that will boost investors’ interest in China in general by easing cross-border financial flows, as well as by partially deregulating foreign investment in the country’s telecommunications sector.
The news of the booming foreign direct investment in China comes as the country’s recently-held International Fair for Investment & Trade and the Belt and Road Investment Congress boasted a whopping 800 billion yuan (around $117 billion) worth of agreements struck between Chinese and foreign companies. Beijing has been broadening its economic ties with the rest of the world, namely receiving 73.6% more in investment from the Netherlands and 17.2% more from the UK, amid an ongoing confrontation with the US.
Washington embarked on a trade war with Beijing back in 2018, a spat that has not ended even after the sides signed the so-called Phase One agreement. The White House is looking to limit the ties of American companies with China by imposing tariffs on Chinese goods, banning US firms from working with the tech giant Huawei, and even mulling over severing the ties between American firms and China for good at some point. The US government has also vowed to exclude companies that outsource to China from tenders on federal contracts and to give major tax credits to those firms that relocate their operations from China to American soil.