China’s Ministry of Commerce reported that it attracted 10,263 foreign-invested companies in the first quarter of 2021.
From an industry perspective, the actual use of foreign investment in the service industry was 237.79 billion yuan, a year-on-year increase of 51.5 percent.
Likewise, as part of this indicator, the high-tech industry grew 32.1%, of which the high-tech services industry increased 43.9% and the high-tech manufacturing industry grew 2.5 percent.
In terms of source, real investment in countries along the Belt and Road, ASEAN, and the European Union increased 58.2, 60, and 7.5%, respectively, year-over-year (including foreign investment data through free ports).
Regarding the regional distribution, the actual use of foreign investment in the eastern, central and western regions of China climbed by 38.2, 36.8% and 91%, respectively.
For the US government, according to an annual report on its relationship with China, this Asian country concluded 2020 in a more precarious economic position than the one that began the year, since both the immediate economic impact of the Covid-19 pandemic and the recovery unequal problems have exacerbated persistent structural problems in the economy.
After a 6.8% GDP contraction in the first quarter of 2020, the government abandoned an official growth target for the first time in decades, publicly emphasizing jobs and stability as priorities at the expense of growth.
In practice, however, the government repeated a familiar state-led investment strategy to stimulate a rapid recovery in the industrial sector, but did little, according to the US government, to shore up the social safety net.
Underpinned by large fiscal transfers, local governments have become even more indebted to the central government, undermining a key priority to separate central and municipal government debt at the beginning of the Xi Jinping administration.
Furthermore, from that same angle, the Chinese government’s decision to allow more foreign investment in its financial sector coincides with an urgent domestic demand for capital, as China’s banking sector faces an unsustainable debt burden.