(Yicai Global) Oct. 22 -- Foreign invested enterprises' entrance into and retreat from the Chinese market this year are all part of normal market behavior and in line with market rules, an official at the Ministry of Commerce said today.

Overall, more companies have entered than have left, and there are more FIEs which plan to hike investment than those who intend to cut it, Zong Changqing, head of the MOC’s Department of Foreign Investment Administration, said when asked at a press conference what he thought of recent media reports that many overseas companies are closing down their Chinese businesses.

The reports just prove that China is a free and convenient environment for FIE investment, Zong said. Some overseas firms are closing their plants because their products are no longer competitive in the Chinese market. Others have decided to transfer investment to labor-intensive areas overseas. Of course, there are individual firms that have left China due to costs and other factors, he added.

However, 99 percent of the 3,000-plus key FIEs in the country have no plans to cut or withdraw capital, according to a recent MOC questionnaire. And there was a 36.5 percent jump in newly-established FIEs in the first three quarters from the same period last year to 36,000.

Profit at foreign-funded industrial enterprises above a designated size grew 7 percent last year from 2019 to CNY1.8 trillion (USD281.7 billion), according to the National Bureau of Statistics. The growth was 2.9 percentage points above the provincial average, despite the impact of Covid-19.

China is expected to rake in over CNY1 trillion (USD156.4 billion) in foreign investment this year, Zong said. The amount may come to over USD160 billion in US-dollar terms, he added.

Editor: Kim Taylor