China
Analyzing China’s Foreign Direct Investment (FDI) Performance in the First Half of 2024
China’s H1 2024 FDI data shows a decline in utilized FDI amount but an increase in the number of newly registered FIEs. Germany and Singapore increased investment, with a focus on high-tech manufacturing and professional services reflecting growing interest in China’s innovation-driven industries.
According to recent data from China’s Ministry of Commerce (MOFCOM), the country’s foreign direct investment (FDI) performance in H1 2024 presents a mixed picture. While the actual utilized FDI amount declined by 29.1 percent year-on-year to RMB 498.9 billion (equivalent to US$69.93 billion), the number of newly registered foreign-invested enterprises (FIEs) reached 26,870, reflecting a 14.2 percent increase year-on-year. Notably, investment from Germany and Singapore in China increased by 18.1 percent and 10.5 percent, respectively, during the January to June period, highlighting the strategic focus of these nations in the Chinese market.
In this article, we delve into China’s H1 2024 FDI data, examining the latest trends and challenges. We also explore strategic opportunities for foreign investors within the current economic landscape. As China prioritizes attracting investment in high-tech manufacturing, modern services, and green energy, understanding these dynamics is crucial for making informed decisions in this evolving market.
High-tech manufacturing, a key focus area for China’s economic strategy, also saw positive developments. FDI in this segment reached RMB 63.8 billion (US$8.94 billion), which constituted 12.8 percent of the total FDI for the period. This figure reflects a year-on-year increase of 2.4 percentage points, indicating growing foreign interest in China’s high-tech and innovation-driven industries. This growth aligns with China’s broader push towards advancing technological capabilities and fostering innovation as part of its economic transformation.
Particularly noteworthy are the substantial FDI inflows into specific segments such as medical instrument manufacturing and professional technical services. In the medical instrument sector, FDI surged by 87.5 percent, highlighting the increased foreign investment in healthcare technology and medical innovations. This growth reflects the sector’s expanding role in China’s healthcare system and its attractiveness to global investors seeking to capitalize on the country’s advancing medical infrastructure.
Similarly, the professional technical services sector saw a significant 43.4 percent increase in FDI, underscoring the rising demand for specialized services and expertise. This growth points to a broader trend of increased foreign engagement in sectors that support technological and professional advancements within China.
Between January and June 2024, investment from Germany and Singapore in China increased by 18.1 percent and 10.5 percent, respectively. This growth highlights a rising interest from these nations even as overall FDI experienced a broader decline.
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
Business
China Telecom Gulf Officially Launches Operations in Saudi Arabia for Business Expansion
China Telecom Gulf was launched in Riyadh, enhancing digital cooperation between China and Saudi Arabia under the “Belt and Road Initiative,” with a focus on technological innovation and infrastructure development.
China Telecom Gulf Launches in Riyadh
On November 21, 2024, China Telecom Gulf was officially inaugurated in Riyadh, symbolizing a significant advancement in China Telecom’s internationalization efforts and commitment to the "Belt and Road Initiative." The event was attended by over 100 dignitaries, including Mr. Liu Guiqing, Executive Director of China Telecom Corporation, and Mr. Fawaz from the Industrial and Commercial Bank of China Riyadh Branch, marking a milestone in fostering a shared future between China and Arab nations.
Commitment to Digital Transformation
In his speech, Mr. Liu highlighted China Telecom’s dedication to collaborating with Saudi enterprises and local governments to enhance digital infrastructure. By leveraging its expertise in technologies like 5G and artificial intelligence, the company aims to provide high-quality communication services, thereby driving socio-economic growth in the region.
Strategic Partnerships for Growth
During the launch, China Telecom Gulf signed strategic agreements with several prominent companies, including Saudi Telecom Company and Huawei. These collaborations are geared towards optimizing digital experiences for Saudi customers and contributing to the broader Sino-Saudi cooperation in technology and economic development, solidifying China Telecom’s role in the Middle Eastern telecom landscape.
Source : China Telecom Gulf Officially Launches in Saudi Arabia for Business
China
India Initiates a Shift in Security Focus Regarding China Amid Economic Ambitions
Since 2014, India’s Modi government aimed to boost manufacturing through the Make-in-India campaign. However, tensions with China led to increased scrutiny of Chinese investments post-COVID-19, limiting their influence.
Modi’s Manufacturing Push
Since Narendra Modi took office in 2014, his administration has focused on boosting the manufacturing sector’s contribution to India’s GDP. The launch of the Make-in-India campaign aimed to enhance manufacturing capabilities and attract foreign direct investment (FDI), even in sensitive sectors such as defense and railways, thereby fostering economic growth.
Shift in Economic Relations
During this period, Chinese companies like Oppo and ZTE sought to capitalize on India’s manufacturing potential. However, the 2020 COVID-19 pandemic highlighted the need for safeguard measures against potential foreign takeovers. In response, India revised its FDI policy to increase scrutiny on investments from neighboring countries, particularly targeting Chinese investments, which now require governmental approval.
Geopolitical Tensions and FDI Impact
Tensions escalated after the June 2020 Galwan clash, severely straining Indo-China relations. This ongoing border standoff has posed challenges to the evolving dynamics between the two nations. As a result of these geopolitical tensions and pandemic-era policies, Chinese capital inflow to India constituted merely 0.43% of the total FDI from April 2000 to December 2021, highlighting a significant downturn in bilateral economic ties.
Source : India begins a rebalance of security concerns over China and economic aspirations
Business
BRICS: China Classifies Crypto as Property and Prohibits Business Ownership
China’s Shanghai court ruled cryptocurrencies are property, boosting optimism in the crypto industry while maintaining a ban on business transactions. This may signal a shift in future regulations.
China’s Ruling on Cryptocurrency
In a pivotal decision for the nation and its BRICS alliance, China has officially classified cryptocurrency as property while maintaining prohibitions against business transactions involving digital assets. A notable ruling from the Shanghai Songjiant People’s Court affirmed cryptocurrencies as property, sparking optimism within the crypto industry regarding future regulations.
Implications for the Crypto Industry
As cryptocurrencies gain significance globally, the Chinese ruling is viewed as a potential-positive shift amidst ongoing restrictions. While individuals can hold virtual currency, businesses remain barred from engaging in investment transactions or issuing tokens independently. This decision has generated anticipation for more accommodating regulations in the future.
Future Prospects for Cryptocurrency in China
Experts like Max Keiser believe this ruling indicates China’s growing acknowledgment of Bitcoin’s influence. As BRICS nations explore increased cryptocurrency utilization in trade, this legal shift could enhance market demand and lead to greater acceptance of cryptocurrencies as a legitimate asset class, setting the stage for potential developments in 2025.
Source : BRICS: China Rules Crypto as Property, Bars Business Holdings
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- India Initiates a Shift in Security Focus Regarding China Amid Economic Ambitions
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