Leading Chinese researchers are calling for increased efforts to attract foreign investment by focusing on China’s pivotal role in the Asian supply chain and leveraging Hong Kong’s strategic position to raise offshore capital.
Liu Qing, deputy director of the National Academy of Development and Strategy at Renmin University of China, emphasized the importance of regional cooperation. “It is precisely because of this trend of [global] regionalisation that we know that each regional centre may gradually strengthen,” Liu stated. “What attracts people to China is that we can further strengthen this Asian industrial chain.”
From January to April, foreign direct investment (FDI) in China fell by 27.9 percent year on year, amounting to 360.2 billion yuan (US$49.7 billion), according to the Ministry of Commerce. The decline in FDI is attributed to weak domestic demand and an economic slowdown, which have deterred foreign investors.
FDI growth in China had already been slowing from 2018 to 2022 after over a decade of stability. The recent downturn underscores the need for China to enhance its role within the regional supply chain to attract more investment.
By reinforcing its position in the Asian industrial network and utilizing Hong Kong’s unique advantages for capital raising, China aims to reverse the declining trend in foreign investments and stimulate economic recovery.
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