Growth of Foreign Used Capital in China Hits Record High on Easing Ownership Rules
Liao Shumin|Liu Jing
/SOURCE : Yicai
Growth of Foreign Used Capital in China Hits Record High on Easing Ownership Rules

(Yicai Global) Aug. 16 -- Last month, China's inbound foreign investment rose to a record high of this year on good momentum brought forth by a looser ownership policy that gives overseas firms more local leverage. 

China attracted 15 percent more foreign investment in terms of newly set up foreign-funded firms' used capital, with a value of CNY50.4 billion (USD7.3 billion), the commerce ministry said in a statement today. Over 5,600 foreign-funded companies were set up in the month of July, which was over double that of the year prior. The capital used was 15 percent more than in June. 

The use of foreign investments in the first seven months mainly embodied newly established firms' good momentum nationwide, said Zhu Bing, the deputy director of the Foreign Funds Department at the Ministry of Commerce. One of the reasons for the growing interest in setting up branches in China is July's shift in ownership policy, which allows firms in more sectors to buy out their local partners and thereby have more power in decision-making, as well as larger stakes in profits.

In the first seven months, major overseas investors added their input. The UK was the driving the largest growth with 86 percent rise of capital from the year before, followed by South Korea with a 37 percent increase, and Japan by a 31 percent rise. Over 35,200 foreign-funded firms were established in these months, which was almost double from the year before. The capital investment of these companies was CNY496.7 billion (USD72 billion), up 2 percent.

The Belt and Road countries also stepped up their China-bound investment with a 30 percent jump and the ASEAN countries chipped in with a 28 percent increase.

Editor: Emmi Laine 

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Keywords: Foreign Funds , New Enterprises , Foreign Investment , One Belt One Road , ASEAN , Ministry of Commerce