Not only is that helping to drive the economic rebound, but with China
reducing barriers to investment and the economy
the only major one likely to grow this year, investment is set to continue flowing into the country.
“US and other foreign firms will continue to invest in China as it remains one of the most resilient economies during the global pandemic and as future growth potential there remains stronger than most other major economies,” said Adam Lysenko, an analyst at Rhodium Group who researches Chinese investment.
The investment boom comes despite continued political uncertainty for foreign firms. The Trump administration has ratcheted up tensions in recent months, placing restrictions on Chinese businesses, especially in the technology sector. China’s policy toward the incoming Biden administration is still unclear. And an investment treaty between the European Union and China hasn’t yet been signed, although it’s getting close.
China is making a bigger effort to boost foreign investment. The government this week published a shortened list of sectors in which market access is restricted, and also said some international
businesses would be able to tap financial support.
Despite the outbreak of the pandemic and the unprecedented economic contraction in the first quarter, almost 19,000 new foreign firms were set up in the first seven months of the year, officials said in August.
The automobile industry is one that’s seen increased activity. China was already the world’s biggest car market before the coronavirus, and although sales are expected to fall for a third year this year, global companies are looking to Chinese demand to boost their fortunes.
Recent investment plans from carmakers
Daimler AG’s chief executive officer said in an interview with the Financial Times in September that the company would invest in China, not Germany, and last month announced a $415 million plan to build heavy trucks in China
Tesla Inc. started production at its first plant in China in January
Nissan Motor Co. is betting on a recovery in Chinese demand to offset losses in other regions, aiming to lift output capacity by about 30% next year, the Yomiuri newspaper reported in October