In a bid to catch up with India in the race to attract further foreign investment, China has opened up more sectors. Offering a piece of government-controlled segments like public transport and railway equipment to foreign players besides cutting down the number of restrictions by a third from 93 to 62.
However, the real reason Beijing opened its doors despite resistance from state-owned enterprises is not just slipping numbers of foreign direct investments. China is worried about US President-elect Donald Trump using China's partially closed market to launch negative trade actions. Chinese authorities are trying to pre-empt adverse action from Trump, who has openly endorsed his antagonism with the communist nation, even accused it of unfair investment practices resulting in the "theft of American jobs."
Commerce Minister Gao Hucheng admitted that foreign direct investments grew at a slower rate of 3.8 per cent last year, as compared to 6.4 per cent in 2015. Whether India will manage to retain the top slot this year, remains to be seen. "US-China commercial relations are in for a rough ride in the coming months, as the Trump administration aggressively pushes China to open its markets further to American imports and investment and applies a more critical eye to Chinese investments in the US," said Scott Kennedy, deputy director of Freeman Chair in China Studies at the Washington-based Center for Strategic and International Studies.
India crossed China after its FDI inflows slipped 23 per cent to $56.6 billion last year. "The big FDI story of the past year is India. After a long period of trailing behind China, the south Asian country is now racing past its formidable rival. India was the highest ranked country by capital investment in 2015, with $63 billion worth of FDI projects announced," said Courtney Fingar, head of content with London-based FDI Intelligence.
