China makes rare but ‘necessary’ foreign investment pitch as ‘they’re not writing cheques’
- Vice-Premier Hu Chunhua said last week that it was ‘necessary’ to ‘make great efforts to attract new foreign investment’
- Coronavirus-induced supply chain and consumption slowdowns, a lingering real estate debt crisis and the recent power shortages are weighing on the economy
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Shanghai turns off decorative lights on the Bund to save power
China’s call this month for new foreign investment, a pitch that was more common 30 years ago, offers evidence of a concern in Beijing that recent setbacks in the world’s second-largest economy are keeping capital offshore.
Hu also stressed that China needs to stabilise existing foreign investment, do more to steady supply chains and “strengthen the confidence of foreign-funded enterprises with practical actions”, according to a Ministry of Commerce statement.
Beijing is becoming increasingly worried that the economic setbacks suffered over the last year and longer-term market changes are stopping foreign firms investing more money into China, according to industry insiders and economists.
There’s a lot of hesitancy now
“They’re not writing cheques,” said Ker Gibbs, executive-in-residence at the University of San Francisco and a former head of the American Chamber of Commerce in Shanghai. “There’s a lot of hesitancy now.”
The major concern for American businesses is that they “can’t get a read” on the economy, Gibbs added.