The Chinese market continues to have a magnetic effect on foreign capital

The fifth China International Import Expo will be held offline as scheduled from November 5 to 10 in Shanghai. [Photo/The China International Import Expo Bureau]

The new outbreak of COVID-19 cases in China has once again given Western media the opportunity to talk about the “flight” of foreign capital out of China. However, more than 250 of the world’s top 500 companies and leading enterprises have registered for the fifth China International Import Expo in November so far, evidence of the continued attractiveness of the Chinese market.

This is also confirmed by data from the Ministry of Commerce. In the first four months of 2022, China’s actual use of foreign investment reached 478.61 billion yuan ($71.22 billion), up 20.5 percent year on year, despite a recent report of the United Nations Conference on Trade and Development indicating that in 2022 FDI flows could follow a downward trajectory or, at best, remain stable.

Currently, inflation in the United States remains high and the Federal Reserve continues to raise interest rates. In addition to creating panic in the US capital market, the move had a “siphon effect” on global capital, especially in emerging markets.

Against this backdrop, many of the world’s leading companies may choose to curb their impulse to pursue short-term profits like “speculative money” and continue to stay in the real economy market.

The preference of foreign capital on the Chinese market is proof of the solidity of the Chinese economy. China not only has a complete industrial system, a huge attracting market and a strong supporting capacity that extends to both the supply and consumption side, but also policies systematic campaigns targeting the epidemic to ensure the stability of supplies and prices, which have not only instilled vitality in market players, but also reassured foreign investors.

The temporary pandemic and market difficulties will not affect the resilience of the Chinese economy, nor change its long-term steady growth trend.

The Chinese market emerges from the epidemic in May, with a resumption of production and activity which is accelerating and smooth logistics circuits. In addition, the performance of foreign trade in May far exceeded expectations, boosting foreign investors’ confidence in the Chinese market.

China’s domestic demand is strong and resilient, its status as the world’s largest commodity trader has been consolidated, and China’s internal and external circulation dynamics remain unchanged. This is the strength of the Chinese market and it will have a strong magnetic effect on global capital.

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