US foreign investment in China surged 53% in the first four months of this year despite Covid lockdowns and relations between the two countries remaining at their lowest in decades, according to data released by China’s Ministry of Commerce.
No breakdown of the US investments was given, aside from a comment that Costco was one of numerous foreign projects highlighted by the ministry.
Foreign capital injections by Costco, plus South Korea’s Posco Chemical, Germany’s Volkswagen and Japan’s Hitachi for their projects in China was well on track, driving a rapid growth of foreign investment in China, Shu Jueting, a spokesperson for the Commerce Ministry, told reporters on Thursday, according to the state-run Securities Times newspaper.
Shu said trade discussions between the US and China were ongoing, and that if Washington lifted trade tariffs on Chinese goods the move would “benefit the US, China and the world.”
Under pressure to tame high inflation, US President Joe Biden said on Tuesday the US was considering dropping tariffs imposed on China by his predecessor Donald Trump.
L’Oreal Shanghai Investment
From January to April, 185 large projects each valued at over $100 million in contracted foreign investment were recorded in China, Shu said, adding that L’Oreal’s recent establishment of an investment company in Shanghai demonstrated foreign companies’ confidence in China’s growth.
Foreign investment by South Korea and Germany in China increased 76.3% and 80.4%, respectively, during the four-month period, the ministry said in a statement on its website. It does not normally publish investment data from the US, South Korea and Germany, but regularly highlights investment from countries involved in the Belt and Road Initiative and the 10 nations in ASEAN.
Foreign capital used in China, excluding that invested in banking, securities and insurance sectors, amounted to $74.7 billion from January to April, which was a 26% year-on-year rise in US dollar terms.
However, it declined 27.5% month-on-month (MoM) in April, compared with a 3.6% MoM decline in March and a 39% MoM increase in February.
• Iris Hong
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