Foreign direct investment (FDI) in China faces “unprecedented difficulties” after falling for eight months, the longest stretch of declines this decade, Chinese Vice Commerce Minister Chen Jian (陳健) said.
The government will announce policies to stabilize investment “soon,” Chen said at a briefing in Beijing yesterday.
Multinationals have reduced spending as they grapple with the global crisis, adding to drags on growth in the world’s third-biggest economy after exports collapsed.
Direct investment in China slid 17.8 percent to US$6.38 billion in May from a year earlier. The latest data also showed that China received US$34.05 billion in foreign investment in the first five months of the year, down 20.4 percent from the same period a year ago.
Chen said the planned policies to stabilize foreign investment would focus on projects that would help create jobs, save energy and protect the environment.
“We will continue to work on the creation of a stable and transparent policy environment, level and open market conditions, and regulated and efficient administrative services for foreign investment,” he said.
Chen said Beijing may allow foreign firms with investments in China to list domestically, as part of efforts to boost trader confidence during the global downturn.
“We will continue to actively work with relevant authorities to study and complete the policy of allowing foreign-invested companies to list in the country,” he said. “We will guide high-quality foreign-invested companies to carry out domestic listings at appropriate times,” he said.
However, Chen said there would be no change to an order announced last month stating domestic firms should be prioritized in bids for projects that are part of a US$585 billion stimulus package unveiled last year.
“The problem now is not that we are protecting [Chinese companies], but that there are signs that domestic products are discriminated against. We just want an impartial environment,” he said.
Foreign-invested businesses account for 30 percent of industrial output, 55 percent of trade and 11 percent of urban jobs, the commerce ministry said.
Foreign direct investment in China totaled US$876 billion at the end of last year, while China invested US$170 billion overseas, a report by the Peterson Institute for International Economics said.
Last year, the nation attracted a record US$92.4 billion, excluding the financial sector.
China’s direct investment abroad also fell in the first half of this year, the official said, adding that the government would use fiscal, financial, foreign-exchange and insurance polices to encourage larger outbound flows.
SHOW OF SUPPORT: As a responsible member of the international community, Taiwan might collaborate with Manila against China’s aggressive actions, MOFA said The Ministry of Foreign Affairs (MOFA) yesterday hinted that Taiwan might join forces with the Philippines to protect navigational freedoms, days after Beijing blocked Philippine supply ships in the South China Sea. The ministry made the comment when asked whether Taipei would be willing to join forces with the Philippines to protect the latter from increasingly aggressive activities by the Chinese People’s Liberation Army Navy and China Coast Guard. Taiwan “is willing to cooperate with any other nation with shared values in areas of common concern, including maintaining peace, stability and prosperity in the Indo-Pacfic region,” it wrote in a statement. A Chinese
WORK TOGETHER: The US cannot assume it does not need friends, Haley said, calling isolationism unhealthy and echoing Pence’s calls to stand with Taiwan Taiwan and the US should jointly call on the UN to hold a hearing on UN Resolution 2758 and curbing China’s aggression, former US ambassador to the UN Nikki Haley said yesterday in Taipei. The UN General Assembly passed Resolution 2758 on Oct. 25, 1971, which states that the People’s Republic of China is the legitimate government of China, which led to it replacing the Republic of China in the UN. However, the resolution “never mentioned ‘Taiwan,’” and the UN should not “allow the Chinese Communist Party to hijack a resolution and claim it’s about Taiwan,” Haley told a news conference. Taiwan should
‘LIKE A BLACK HOLE’: The figure is about 7% of China’s reported military spending, although diplomats and experts say that number is often opaque or not fully inclusive China spent about US$15 billion, or 7 percent of its defense budget, on exercises in the western Pacific last year, according to a previously unpublished Taiwanese estimate, showing Beijing’s investment in military activity around Taiwan and its neighbors. The internal research by the military, reviewed by Reuters, offers a rare look into a slice of China’s defense spending as Beijing has ramped up its military presence amid rising tensions in the region. China claims Taiwan as its own and is also locked in disputes with several nations over sovereignty of large parts of the South China Sea and the East China Sea. “This
MAJOR JAM: The two tests are being conducted at sea because the system is powerful enough to disrupt civilian devices, a source familiar with the matter said Taiwan is next month to test a jamming device that might cause large-scale electromagnetic interference in the sea off Yilan County and along its coastline, a government notice to limit navigation in the test area said. Two radio jamming tests encompassing the coastal region between Toucheng (頭城) and Suao (蘇澳) townships and the nearby sea would be conducted from Sept. 2 to 6 and from Sept. 9 to 13, a Ministry of Transportation and Communications notice said. A source with knowledge of the matter said the tests are trials for a new mobile electronic warfare system developed for the armed forces