Sang Baichuan:FDI’s future opportunities

(w88 login Economic Weekly2010Year01month07日16:10Sang Baichuan)

Dean of the Institute of International Economics, w88 casino

The global economic changes caused by the financial crisis have profoundly affected the worldFDIProspects of (Foreign Direct Investment),Also changingFDI's pattern. On the road to gradual stabilization and recovery of the world economy, the worldFDIThere will be a slow recovery trend, butFDI's regional structure and industrial structure are facing huge adjustments.

Financial crisis, globalFDIContinuous sharp decline.

First of all, multinational companies are constantly divesting capital to reduce costs and cooperate with corporate restructuring; secondly, they are affected by the shrinking financial market and the cash shortage of multinational companies,Cross-border mergers and acquisitions decreased significantly,And cross-border mergers and acquisitions have always been in the past few yearsFDIAn important driver of growth.

According to the United Nations Conference on w88 and Development2009World Investment Report》analysis, in2008Year GlobalFDIInflow decreased14%Based on, 2009The annual downward trend is more obvious and is expected to decrease throughout the year30%To40%。2010YearFDIIt is expected to recover slowly,2011It rebounded further in 2016 and basically reached2008year level.

　　2009In the global economic recession, first of all, developed countries were hit hard by the financial crisis and their economies declined significantly. This had a negative impact on the developed countries as a wholeFDI11110_111562009The year was not immune to the impact of the financial crisis and global economic recession. absorbed by South Asia, East Asia and Southeast AsiaFDIContinuous decrease; Asia's newly industrialized economies have been hit hard by the crisis, and their relative importance in foreign direct investment in Asia is declining. In addition, the reduction in investment in resource development in Africa has led to Africa absorbingFDIThere has been a decline, and the investment opportunities brought by privatization have been basically exhausted, leading to absorption by the CIS countries and Southeast European countriesFDIExperienced8years of growth followed by a sharp decline. w88 login and India, as the countries with the best growth potential, have becomeFDI11497_11508FDI11535_11546

expected in2010In the year, the global economy ended its decline and experienced2009The depression in the second half of the year has gradually entered a difficult recovery stage. The industrial restructuring and corporate restructuring of developed countries such as the United States are gradually unfolding, which will attract more international investment into the U.S. market. Especially in the recovery stage, the expectation of the depreciation of the US dollar will gradually make international investment inflows more enthusiastic; in emerging economies“Gold Brick4Country”and“Diamond11Country”w88 login, India, Russia, Brazil, Vietnam, Philippines, Indonesia, Bangladesh, Turkey, Pakistan, Egypt, Iran, Mexico, Nigeria, South Africa and other countries have relatively strong economies and strong recovery capabilities after the financial crisis. They will be more important in the future economic recovery processFDIis more attractive, and international capital will be optimistic about the prospects of these emerging economies,2010The year will be up for grabsFDIWinners in; The economic risks of some moderately developed countries such as Greece, Spain, and the United Arab Emirates still cannot be underestimated. The risks contained in their financial and fiscal operations may become unfavorable factors that drag down the recovery of the world economy, which will also affectFDIConstraints on growth.

　　2010As the global economy enters the track of recovery, some countries may choose to withdraw from the funds they injected to rescue companies and financial institutions during the crisis, and the shares they hold in companies. The capital chains of multinational companies begin to loosen, and cross-border mergers and acquisitions will gradually become active, and may even spawn a new round of cross-border mergers and acquisitions. Attention to global climate and environmental changes will prompt countries to develop low-carbon economies and accelerate energy conservation and emission reduction. This field will usher in economic structural adjustment and promotion of low-carbon economic developmentFDI's substantial growth; agriculture, some service industries that are not sensitive to business cycles and maintain relatively stable demand, and the pharmaceutical industry with promising long-term growth prospects will become the driving force in the new yearFDIA hot spot for growth.

FDIw88 login in Change

　　2009Year, w88 login absorbedFDIThere were significant fluctuations for a time. Although multinational companies still ranked w88 login as the most attractive investment destination in the world, due to the tight capital chain of multinational companies, as well as w88 login's own economic structural adjustment, policy changes, a substantial increase in the export cost of labor-intensive products, and a decline in overseas demand, the stockFDIA large number of foreign-invested enterprises along the coast were evacuated and closed or transferred to neighboring countries such as Vietnam and India. As w88 login has decisively introduced a series of measures to reduce the costs of labor-intensive foreign-invested enterprises and stabilize foreign investment, and the international market has gradually stabilized, the momentum of foreign investment withdrawal has been controlled.

On the one hand, w88 login’s stockFDIFrom large-scale evacuation to restoration of stability, on the other hand there are new additionsFDIThe growth rate has dropped significantly, but the decline is much lower than that of the worldFDIDecreased, still the most popular investment destination, and new additionsFDIThe decline rate shows a trend of first high and then low, and gradually converges.

In2010Year, w88 login is absorbingFDIThere are many opportunities:

First, in the drastic changes in the world economic landscape, the trends of economic globalization and regional economic grouping will not fundamentally change. As the main force promoting economic globalization, multinational companies will inevitably continue to promote the development of global industrial division of labor in order to find favorable investment sites and allocate resources globally. The trends of production globalization and investment globalization will continue. As the world economy recovers, the pace of foreign investment by multinational companies will inevitably accelerate. This is absorbed by w88 loginFDIProvide an enabling environment.

Second, in the process of global economic recovery, the ability of multinational companies to invest abroad has gradually recovered. As an important economy with sustained economic growth, w88 login has great appeal to multinational companies. Most multinational companies are firmly optimistic about the Chinese market and investment prospects. w88 login can maintain strong competitiveness in the competition for investment from multinational companies.

Third, w88 login has adopted a series of measures to expand domestic demand and accelerate the pace of economic structural adjustment and upgrading, providing a rare opportunity for international investment to enter the Chinese market.

Fourth, w88 login has taken the initiative to increase energy conservation and emission reduction efforts, paving the way for the development of a low-carbon economy, which can effectively increase the return on investment in the low-carbon economy and attract a large number of investments from developed countries that have first-mover advantages in the low-carbon economy.

Of course, under the conditions of drastic changes in the global economic order, w88 login also faces huge challenges in utilizing foreign investment:

First, the process of world economic recovery cannot be smooth sailing. As the locomotive of the world economy, the United States not only has its deficit and debt ratios hit new highs, becoming the country with the largest deficits and debts in the world, but its unemployment rate remains high. Hotspots for technological innovation have not yet been formed. It will take time to truly get out of the shadow of the financial crisis. This determines that the world economy may linger in the depression and slow recovery phase for a long time. This will affect the worldFDIScale of outflows and Chinese absorptionFDI16846_16852

Second, in the low-end field,w88 login’s labor-intensive industries are facing challenges from neighboring developing countries in attracting foreign investment,For example, Vietnam, Malaysia, Indonesia and other countries have increased their efforts to attract investment,Affected by rising production costs, w88 login’s comparative advantages are gradually weakening; in the high-end field,w88 login faces competition from developed countries,For example, in high value-added industries such as energy conservation and emission reduction, technology research and development,Developed countries are also increasing investment,The financial subsidies issued by its foreign investment promotion agencies and financial departments are relatively strong, and some multinational companies' R&D centers may withdraw domestically.

Third, the development of foreign-invested enterprises has increased w88 surplus and w88 friction, and the appreciation pressure of the RMB against the US dollar and the euro has increased. In this way, the export environment for China's foreign-invested enterprises becomes more severe, and some export-oriented foreign-invested enterprises may choose to withdraw.

Fourth, competition between foreign-invested enterprises and domestic-funded enterprises has intensified. With the development of w88 login's economy and the growth of domestic enterprises, competition between domestic and foreign-funded enterprises has begun in all directions, and the conflicts between domestic and foreign-funded enterprises competing for markets and resources have increased significantly. Domestic enterprises with advanced technology, standardized management and strong economic strength will also be interested inFDIConstitutes huge competitive pressure. With the changes in the competitive environment of the domestic market, some foreign-invested enterprises with weak competitiveness have moved abroad and withdrawn from the Chinese market.

Fifth, the double surplus of foreign-invested capital items and w88 items has resulted in passive investment of RMB, making China's liquidity management more difficult. Strengthening liquidity management and adjustmentsFDIAmong the preferential policies and fair policy treatment for domestic and foreign-invested enterprises, some foreign-invested enterprises that simply want to enjoy special preferential policies will inevitably withdraw.

Sixth, w88 loginFDIThe cost is on the rise. Under the condition of double surplus in w88 items and capital accounts, the scale of foreign exchange reserves has expanded, and the pressure for RMB appreciation has increased. The appreciation of the RMB will inevitably lead to an increase in asset prices and real estate prices. The appreciation of the RMB also means an increase in export costs. Although the appreciation of the RMB will reduce the cost of imports, because China's bulk imported products such as iron ore, oil, soybeans, etc. have formed an oligopoly situation in the international market, China is almost“The price will go up for whatever you buy”;w88 login is absorbing a lotFDIw88 login has become the world's manufacturing center, which has also aggravated the shortage of raw materials, energy and other resources, leading to rising prices of resource products; with the accelerated development of industrialization, environmental problems have become increasingly severe, and the fundamental way to solve environmental problems lies in the internalization of environmental costs, that is, companies can only bear the cost of environmental management in the end. Therefore, the environmental costs of companies are bound to increase; with social and economic development, per capitaGDPIn order to allow the general public to share the fruits of economic development, the income level of workers, especially low-income earners, must be increased, which will inevitably increase labor costs. The overall increase in the costs of assets, import and export, raw materials, energy, environment, labor, etc. means that the costs of foreign-invested enterprises are showing an upward trend, which will weaken the international competitiveness of foreign-invested enterprises' export products and accelerateFDILocation transfer.

In short, w88 login’s low-end fieldsFDIFacing the challenges of developing countries, high-end fieldsFDIFacing competition from developed countries,2010The pressure to utilize foreign capital cannot be underestimated.

w88 login should seek to utilize foreign capital for strategic innovation

Faced with the ever-changing world economic situation and international direct investment environment, China should, on the one hand, seize the opportunity of the gradual recovery of the global economy, take advantage of the large scale of foreign exchange reserves and the obvious improvement of enterprises' foreign investment capabilities, boldly expand foreign investment, and decisively carry out cross-border mergers and acquisitions; on the other hand, in the development of low-carbon economy, industrial restructuring, and expansion of service w88, China should actively absorb international investment and seek strategic innovations in the use of foreign investment.

First, promote the inward relocation of foreign investment in coastal labor-intensive manufacturing industries.

Under the conditions that w88 login’s industrialization process is far from over, and the typical dual economic structure in which relatively backward rural areas and traditional agriculture coexist with relatively developed cities and modern industry and service industries is accelerating, a large number of rural surplus labor needs to be transferred out and enter non-agricultural industrial sectors. There is still huge development potential and space for w88 login’s labor-intensive industries. past3021103_21212

Secondly, strengthen economic cooperation between coastal areas and inland areas.

The mainland needs to strengthen cooperation with the coast and use the coast as an information center, media center and communication link for foreign investment in the mainland, and as a hub for the mainland to connect with overseas markets; the mainland should also take advantage of the relatively low cost advantages of labor, land, etc. to create a regional environment suitable for investment and enhance the attraction of foreign investment. By pairing with coastal provinces, cities and counties, it helps coastal foreign-invested enterprises to relocate to the mainland to form a cluster effect.

Thirdly, expanding domestic demand will promote the transformation of foreign investment in coastal labor-intensive manufacturing industries from cost-seeking to market-seeking.

If coastal labor-intensiveFDIRelocating production to the mainland can be sold domestically. Compared with manufacturing in the mainland and selling overseas, it can greatly reduce the company's logistics costs. In this way, in the past coastal cost-seeking typeFDIwill transform into a market-seeking typeFDI。 (Source of this article: w88 login Economic Weekly Author: Sang Baichuan)