What Are the Benefits of Making a Direct Foreign Investment?

FDI (International Direct Investment) is one of the main forms of modern internationalization of capital. According to the definition of the International Monetary Fund, FDI refers to: an investment in which a company operating in a country other than the investor has a continuous interest. Its purpose is to Have a say in the management of the enterprise.

Foreign Direct Investment

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Foreign Direct Investment (FDI)

Multinational companies are the main form of FDI.

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On October 23, 2012, the latest issue of Global Investment Trend Monitoring released by UNCTAD showed that China absorbed 59.1 billion US dollars of foreign direct investment in the first half of this year, although it fell by 3%, it still surpassed the United States and became the world s largest foreign country. Direct investment destination. ^[1]

The head of the Foreign Investment Department of the Ministry of Commerce said in an interview with this reporter that under the circumstances of the current slow and tortuous global economic recovery and the increase in uncertain and unstable factors facing international investment cooperation, China's absorption of foreign investment has maintained a strong competitiveness This fully shows that the majority of international investors continue to be optimistic about China's development prospects, increasingly pay attention to China's market potential, and highly recognize China's investment environment.

The person in charge said that for many years, the Chinese government has consistently adhered to the basic national policy of reform and opening up, actively participated in international industrial division of labor and cooperation, and worked hard to create an open and transparent legal and policy environment and efficiency for various market entities, including foreign-invested enterprises. The administrative environment and market environment of equal competition, sincerely solve the difficulties and problems encountered in the operation of foreign-invested enterprises. China and the majority of international investors have established a strong trust, and Sino-foreign economic and trade relations and investment cooperation have repeatedly withstood the test of changes in the international political and economic situation, showing a strong vitality. ^[1]

The person in charge also said that in the current international economic situation, attracting foreign investment still faces some difficulties and challenges. China will further open up to the outside world, vigorously strengthen its own investment environment, continue to optimize public services and management, continuously improve the market system, and provide investors with a fair, stable, and transparent investment environment. The person in charge emphasized the need to clearly protect the legitimate rights and interests of foreign-invested enterprises in accordance with the law, and treat investors from different countries and regions with equal treatment. It is believed that with the joint efforts of Chinese and foreign parties, the vast number of foreign-invested enterprises will usher in a broader prospect in the process of China's economic development. ^[1]

On January 30, 2015, according to the "Global Investment Trend Monitoring Report" released by UNCTAD, the global inflow of foreign direct investment reached 1.26 trillion US dollars in 2014, a decrease of 8% from 2013. China's foreign investment absorption in 2014 reached US $ 119.6 billion (excluding banking, securities, and insurance), a year-on-year increase of 1.7%, and foreign investment inflows became the first in the world for the first time.

In response, Sun Jiwen, a spokesman for the Ministry of Commerce, said in a statement that in recent years, the Chinese government has accelerated the establishment of a new open economy system, further expanded opening up, accelerated the transformation of government functions, and vigorously promoted reforms focusing on simplifying administration and decentralization. The China (Shanghai) Pilot Free Trade Zone has explored the implementation of a national treatment plus negative list management model for foreign investment prior to admission, while increasing the protection of the legitimate rights and interests of foreign-invested enterprises, and the scale of attracting foreign investment has remained at a high level. ^[2]

On September 8, 2015, the World Investment Report 2015 (Chinese version) first issued by UNCTAD in Xiamen showed that in 2014, FDI (Foreign Direct Investment) flowing into China reached US $ 129 billion, a year-on-year increase of 4%. For the first time, China has surpassed the United States as the world's largest inflow of foreign capital.

According to the report, the top 10 global FDI inflows in 2014 were: China, Hong Kong, the United States, the United Kingdom, Singapore, Brazil, Canada, Australia, India and the Netherlands.

Zhan Xiaoning, director of the UNCTAD Division of Investment and Enterprise, said that this reflects that China is still one of the most attractive investment destinations in the world and that China's position and role in the international investment landscape have been further strengthened. On the other hand, this is also due to the decline in US foreign inflows affected by a single block divestiture transaction. ^[3]