May's 5.9 percent year-on-year growth in China's actual use of foreign direct investment (FDI) signals a positive shift in global business confidence in the country, a prominent Chinese economist said on Tuesday in Beijing.
Latest data released Monday by the Chinese Ministry of Commerce shows that actually utilized foreign investment nationwide in May reversed previous monthly declines to grow by 5.9 percent compared with the same period last year, reflecting strengthening multinational sentiment.
Pan Yuanyuan, deputy director of the International Investment Division of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, explained that last month saw a rapidly increasing number of newly established foreign-invested firms in China.
"A number of key and major foreign-invested projects have entered the peak period of capital investment, construction and commissioning. The number of newly established foreign-invested enterprises has risen rapidly, and more small and medium-sized foreign firms are helping China improve its industrial ecosystem. These factors contributed to the positive monthly turnaround in the May data and narrowed volatility compared with the same period last year, an indication that foreign enterprises' confidence in investing in China continues to strengthen and China's appeal as a global investment hotspot has further increased," she said.
The latest data also shows that over 25,000 foreign-invested firms were newly established in China between January and May, up 5.3 percent year on year.
During the period, nearly 4,000 foreign-invested companies increased their investment in China, according to the data.
China's Ministry of Commerce, alongside other government departments, released an action plan on Monday to stabilize and optimize foreign investment utilization.
The action plan details 15 measures to be taken across five areas, which include expanding market access, facilitating investment procedures, enhancing investment promotion, strengthening services and guarantees for foreign investment, and improving foreign capital management.
It also outlines concrete measures to promote the "Invest China" initiative and fully ensure national treatment for foreign-funded enterprises.
Growth in actually used FDI signals improving global business confidence in China: economist
