Advanced manufacturing, health and retirement 'top targets'
China remains popular among foreign investors despite reports that foreign companies are leaving amid increasing labor costs, with growing interest in the advanced manufacturing sector, according to surveys, fund inflows and company announcements.
Experts said on Tuesday that this reflects the country's effective industrial upgrading and improved business environment.
South Korean technology giant Samsung Electronics Co is among the latest foreign companies to indicate plans to expand investment in China.
The company said in a filling on Monday that it is considering increasing NAND memory chip production capacity at its facility in Xi'an, capital of Northwest China's Shaanxi Province, according to Reuters.
Samsung has reportedly invested $7 billion in the Xi'an base to make 3D NAND memory chips, which are used for data storage on devices like smartphones.
Janssen Pharmaceuticals Inc, a subsidiary of the US-based Johnson & Johnson pharmaceutical company, announced plans to invest more than $500 million in China to develop treatments for pulmonary disease, the Economic Information Daily reported on May 19.
U.S. online home-rental marketplace Airbnb also decided to expand in China. Its PR representative told the Global Times in April that the company will double its investment this year and nearly triple the number of staff in China to 180.
A survey of 505 foreign companies from Europe and elsewhere by London-based EY showed that China is third among investment targets after North America and Western Europe.
Among Japanese companies responding to a Japan External Trade Organization survey in November 2016, 40.1 percent said that they expected to expand in China in the next one to two years, up 2 percentage points from the 2015 survey.
"Foreign companies see new opportunities generated by China's aggressive shift from a labor-intensive economy into a high-technology and services-oriented one," Xu Hongcai, deputy chief economist at the China Center for International Economic Exchanges, told the Global Times Tuesday.
During the first four months of this year, foreign investment utilized in the high-technology services sector hit 36.56 billion yuan ($5.3 billion) up 12.4 percent year-on-year, while total foreign investment fell 0.1 percent to 286.41 billion yuan, data from the Ministry of Commerce (MOFCOM) showed.
In the January-April period, 9,726 foreign-invested enterprises were newly established in China, up 17.2 percent from a year earlier.
Xu noted that advanced manufacturing will be a major target of foreign investors under the "Made in China 2025" strategy.
The "Made in China 2025" strategy proposed by Premier Li Keqiang in his government work report in 2015 aims to upgrade China from a manufacturing giant into a world manufacturing power.
Some foreign organizations such as the American Chamber of Commerce in China have wondered if the "Made in China 2025" plan is based on local protection. In response, Vice Minister of Industry and Information Technology Xin Guobin reiterated on May 24 that all companies in China, whether domestic or foreign, will receive same treatment while participating in the strategy.
"China is creating a more transparent and open business environment, helping the country maintain its attractiveness among foreign investors," Wang Jun, deputy director of the Department of Information at the China Center for International Economic Exchanges, told the Global Times Tuesday.
On Thursday, MOFCOM spokesman Sun Jiwen told a regular briefing in Beijing that the central government is preparing to lift restrictions on foreign investment in the vehicle sector and advanced manufacturing.
In the 2017 government work report, China promised to further lower market access for foreign investors in services, manufacturing and mining, as well as support bond issues by foreign-invested companies.
Wang called for more support such as tax cuts for advanced manufacturing to attract foreign investors into this fledging sector. This segment of China's industry lacks core technologies, which pushes up businesses' operating costs, Wang added.
He added that foreign investors will focus on China's healthcare and retirement industries, which are expected to boom in the near future as consumption rises.
