Last year, there was an increase of foreign investment into China as the world’s second largest economy’s size and growth stood out in a world still trying to struggle with the pandemic. Such participation contributes to international use of the Chinese currency, while foreign businesses bring jobs, tax income and expertise to the local market.
In a statement release, senior director of JLL North China capital markets, Michael Wang, said, Beijing is expected to remain a strong choice for foreign investors, particularly as the nation’s capital is predicted to see more signs of recovery sooner than most other major markets overseas. Foreign investors claimed more than a third of commercial real estate deals, an increase from prior years, the proportion rose from 22%, or just over a fifth, in 2018, to 30% in 2019 and 35% in 2020, according to a property manager also from JLL.
Sales transactions of RMB47 billion (USD7.26 billion) in 2020 topped that of 2018, but the market is still affected from the brunt of the pandemic as sales volume was far off a multi-year high of RMB80 billion in 2019, also commented JLL.
In late 2019, coronavirus started in the Chinese city of Wuhan, and within months the disease spread abroad and became a global pandemic. However, by the second quarter after which the Chinese authorities enforced stringent measures to minimise human contact, the outbreak stalled within China.
As of November, foreign direct investment for 2020 reached USD129.47 billion, according to official data. And also according to estimates released from Macquarie, that puts China on track for record-high foreign direct investment and in financial markets, foreign investors more than doubled their purchases of Chinese bonds for a record high RMB1.1 billion in inflows last year.
Growing foreign interest in China and the capital city of Beijing are part of longer-term trend.
Over the last couple of years, China’s rapid economic growth and hundreds of millions of consumers have attracted international consumer brands, automakers and financial institutions. And in addition, the Chinese government has relaxed restrictions on foreign investment.
But, according to some critics, the relaxed restrictions came too slowly and unfair practices remain, such as requirements to transfer key technology in order to do business in the country.