On January 20, 2021, officials from the Department of Foreign Investment at the Ministry of Commerce presented a briefing on China’s utilized foreign investment in 2020. 

In 2020, China weathered the severe impact of the COVID-19 pandemic. Despite the sharp decline in global cross-border direct investment, China’s utilized foreign investment increased in three metrics: the total amount of foreign investment, rate of growth, and share of the global total, achieving the goal of stabling foreign investment. For the full year, utilized foreign investment exhibited the following four features: 

Firstly, the scale of FDI inflows reached an all-time high. In 2020, the actual use of foreign investment totaled RMB 999.98 billion in China, an increase of 6.2% year-on-year (equivalent to USD 144.37 billion, an increase of 4.5% year-on-year; excluding the banking, securities and insurance industries, the same below), reaching another record high.

Secondly, the structure of FDI flows was further optimized. In the service sector, the actual use of utilized foreign investment totaled RMB 776.77 billion, rising by 13.9% and accounting for 77.7% of the total. FDI inflows to the high-tech industry increased by 11.4%, while FDI inflows to the high-tech service industry surged by 28.5%, with R&D and design services, technological achievement conversion services, e-commerce services and information services experiencing an increase of 78.8%, 52.7%, 15.1% and 11.6%, respectively. 

Thirdly, the main sources of foreign investment remained steady. FDI inflows from the Top 15 countries and regions with foreign investment in China increased by 6.4% and accounted for 98% of the total. Among these countries and regions, FDI inflows from the Netherlands and the United Kingdom surged by 47.6% and 30.7%, respectively. ASEAN investment in China grew by 0.7%. 

Fourthly, certain regions proved to be drivers of growth. FDI inflows to China’s eastern region increased by 8.9% and made up 88.4% of the total, with the major provinces, including Jiangsu, Guangdong, Shanghai, Shandong and Zhejiang, seeing an increase of 5.1%, 6.5%, 6.6%, 20.3% and 18.3%, respectively. FDI inflows to certain provinces in the northeast and central-western regions increased significantly, with Liaoning, Hunan and Hebei experiencing a growth of 13.7%, 28.2% and 35.5%, respectively.