Foreign firms still betting on China

China remains attractive for FDI

First of all, profit-driven investors make their decisions mainly based on cost, revenue and market expectations. That a certain part of labor-intensive foreign capital has withdrawn from China and relocated to Southeast Asia does not stand for a massive capital outflow in any sense. The shift of labor-intensive industries is a byproduct of China's structural upgrading.

Actually a number of companies including BMW and Apple have decided to increase their investment in China recently, demonstrating their confidence in its long-term growth prospects. Compared with other countries, China's huge market and relatively mature industrial system and chain provide it with lasting and unmatched advantages in attracting foreign capital.

Furthermore China has sent multiple signals that it will continue to deepen reform, particularly those that better serve foreign capital. As the government position paper, The Facts and China's Position on China-US Trade Friction, made clear, the country is firmly committed to protecting the lawful rights and interests of foreign businesses in China. At the same time, the negative list for foreign investment has been shortened significantly. The market access to industries including services is being expanded gradually. All these are being done to build a more agreeable investment climate for foreign businesses.

Despite their complaints about China, US enterprises and business organizations have expressed their hope that the trade spat between China and US will soon be resolved through discussions. They are willing to further cooperate with China, rather than decoupling from China as some have claimed. On the whole the foundation for China-US cooperation is rather solid.

Dong Yan, a senior researcher at the Chinese Academy of Social Sciences.