Summary
China's actual utilised foreign direct investment (FDI) reached RMB 402.14 billion in the first half of 2024, with both May and June recording year-on-year growth. Nearly 4,800 foreign firms expanded their investment in China during the period. FDI in high-tech industries surged 33.2% year on year, accounting for a record 42.4% of total FDI.
Meng Huating, director of the Department of Foreign Investment Administration at the Ministry of Commerce, said foreign investment absorption is stabilising and improving. Vice Minister Ling Ji noted that the stock of foreign investment in China stands at nearly US$4 trillion, and the number of newly established foreign firms rose 5.3% year on year. BASF Chairman Martin Brudermüller said stopping investment in China means exiting half the global market, while Mercedes-Benz Chairman Ola Källenius called China's market a Champions League.
Services accounted for 57% of FDI in the first half, with modern services becoming a hotspot. A European Chamber of Commerce survey shows 75% of companies believe their production efficiency in China is higher than the global average.
Commentary
The 33.2% year-on-year growth in high-tech FDI, with a record 42.4% share and nearly 4,800 foreign firms expanding investment, underscores China's market shift from cost-driven to innovation-driven. For New Zealand SMEs in primary industries, the competition landscape has escalated: foreign giants like BASF and Mercedes-Benz are accelerating local R&D and vertical supply chain integration, narrowing the scope for simple raw material export or OEM models. Services FDI accounts for 57%, with rapid expansion in modern services and green technologies.
NZ companies can leverage differentiated advantages in agritech, health foods, and environmental technology to embed in China's foreign-invested ecosystem or co-create niche solutions with Chinese partners. The EU Chamber survey shows 75% of foreign firms in China have higher production efficiency than global averages, indicating a strong supply chain cluster effect. NZ SMEs could consider asset-light trials via cross-border e-commerce to tap into consumption upgrading in tier-2 and tier-3 cities, or participate in smart farming and sustainable packaging projects through technology collaborations.
China has released an updated catalogue encouraging foreign investment, with preferential policies for central and western regions and modern services. Early movers in these policy beneficiary areas can secure small entry points. The vast foreign-invested ecosystem is shifting from one-way technology transfer to collaborative co-creation.
NZ companies must focus on high-value-added, strongly localised niche strategies to find their place in the world's most competitive arena.
Keywords: foreign investment, China market, high-tech industries, multinational enterprises, New Zealand SMEs, supply chain, innovation, business environment
Source: Xinhua Net
Disclaimer: This article is compiled from publicly available sources for general information only. The analysis and commentary are editorial opinions. MiDeer Observer does not guarantee the accuracy or completeness of the information provided. Readers should seek independent professional advice before relying on this content, or contact us for more information.
