Illustration: Cheng Xia/GT

Some Western media outlets have run reports hyping the claim that "foreign investors pull record amounts of money from China." Such efforts have fueled a new round of commentary about a "stalling Chinese economy,mk" which has repeatedly been struck down by reality. 

Bloomberg cited a single data point, stating that China's direct investment liabilities in its balance of payments dropped almost $15 billion in the April-June period, but this does not represent the full picture of China's economic reality and its attractiveness to foreign investment. 

It is well known that capital flows are affected by many different factors, including interest rates, international liquidity and returns on investment. Global flows of foreign direct investment (FDI) fell by 12 percent to $1.3 trillion in 2022. 

The decline was driven mostly by financial transactions of multinational enterprises in developed economies, where FDI fell by 37 percent to $378 billion, according to the United Nations Conference on Trade and Development. In 2023, global FDI flows fell by 2 percent, partly due to trade and geopolitical tensions amid a decelerating global economy.

The situation in 2024 is not yet clear, but what is certain is that short-term fluctuations in China's FDI are normal amid the global economic downturn. China's economy has shown strong resilience, great potential and vitality, and its long-term attractiveness to foreign investment remains unchanged.

The practice of reform and opening-up since 1978 has shown that openness brings progress. China has made itself the world's second-largest recipient of FDI. Despite a short-term drop in FDI in recent months, the country continued to see double-digit year-on-year growth in the number of newly established foreign-invested firms during the period.

As the scale of FDI reaches new highs, the structure of China's FDI continues to be optimized. China is one of the world's most attractive destinations for foreign investment, especially in high-tech industries. In the first half of 2024, the manufacturing sector utilized 141.86 billion yuan ($20.27 billion) in foreign capital, accounting for 28.4 percent of the national total. High-tech manufacturing attracted 63.75 billion yuan, 12.8 percent of the total, up 2.4 percentage points from last year.

Quality is, to some extent, more crucial than quantity. As China pursues industry upgrades for high-quality development, many foreign investors, especially those with advanced technology, choose to expand their investments in China, which proves the economy's competitiveness and the attractiveness of China's investment climate.

In general, the country's sustainable economic growth, a continuously optimized business environment and the transformation of the economy to one led by domestic consumption will help sustain China's appeal among foreign investors. The 2024 Kearney Foreign Direct Investment Confidence Index report released in April upgraded China's ranking from seventh to third, just after the US and Canada, according to media reports. It shows foreign investors' confidence in China is on the rise. 

The rise in foreign investors' confidence is a result of China's introduction and implementation of many policies to advance high-standard opening-up. With economic globalization encountering challenges, protectionism is on the rise, especially in some developed economies. In contrast to the anti-globalization practices, China is actively promoting high-standard opening-up.

China has pledged to foster a first-class business environment, protect the rights and interests of foreign investors, further ease market access and share its development dividends with the entire world.

China's pursuit of high-standard opening-up offers many opportunities to global investors. It is hoped that Westerners can look at the big picture in an objective and comprehensive manner, allowing them to seize these opportunities.

The author is a reporter with the Global Times. [email protected]