(Yicai) April 9 -- China moved up four slots to take the third position in this year's Foreign Direct Investment Confidence Index, signaling a surge in foreign firms' local units and factories in the next three years, according to American consulting firm Kearney.

Only the United States and Canada, which have held onto the top two spots in the index for 12 straight years, rank above China, the Chicago-headquartered management consulting firm said in a report released yesterday. The annual executive survey shows which countries are likely to gain the most FDI in the next three years.

The world's second-largest economy was No. 1 in a corresponding ranking for emerging markets, surpassing the United Arab Emirates, Saudi Arabia, and India.

China has a large economic scale and possesses a more stable and positive policy environment compared to some other emerging countries, He Xiaoqing, China head of Kearney, said at a press conference yesterday.

"In recent years, the Chinese government has consistently conveyed a positive stance on strengthening openness to the outside world," He said, giving examples of opening up foreign investment in the banking sector, fully lifting restrictions on foreign investment in the manufacturing industry, as well as easing market access for telecommunications, healthcare, and other service industries. Moreover, after giving visa-free access to German and French citizens, the exemption policy was expanded to six more European countries, continuously boosting investor confidence, she added.

Companies are feeling more optimistic about investing abroad. Some 88 percent of polled executives said that they are planning to increase their global FDI in the next three years, up 6 percentage points from last year. The level of net optimism on the global economy rose to 64 percent while net pessimism decreased to 29 percent from 35 percent.

Kearney also mapped executives' takes on artificial intelligence. More than 70 percent of them said they are using AI moderately or significantly in business operations, expecting to apply AI to improve customer service and chatbots, automate manual processes, and enhance supply chains. Some 63 percent of respondents said they will increase the use of AI to guide investment decisions, reduce costs, as well as improve efficiency and decision-making accuracy.

The latest survey, conducted in January, targets business leaders from firms with annual revenues of USD500 million or more in 30 countries. Most participants are service providers at 46 percent, followed by industrial companies at 45 percent, and the remainder are information technology firms. Kearney has published the annual report since 1998.

Editor: Emmi Laine