A corner of Walmart supermarket in Beijing over the weekend Photo: Li Xuanmin/GT

China is highly likely to climb to the world's No.1 position in terms of foreign direct investment (FDI) next year, surpassing the US, with the value estimated to hit $140-150 billion, a former Ministry of Commerce (MOFCOM) official told the Global Times on Tuesday.

A huge domestic market and complete supply chain are two key factors that will play a bigger role next year to continue attracting foreign-funded companies, said Wei Jianguo, a formerly vice minister of the MOFCOM.

Statistics from the MOFCOM showed that 36,747 foreign-invested companies were newly established in China in the January-November period this year. The actual utilized foreign capital reached $124.39 billion, up 2.6 percent on a yearly basis.

"Foreign capital is likely to reach around $130 billion this full year," Wei estimated.

The markets were surprised by the first-quarter figure released by the MOFCOM, which showed that US investment in China surged by 65.6 percent year-on-year, even as the two countries were locked in a growing trade dispute.

US-based retail giant Walmart announced in November that it planned to open 500 new stores in China over the next five to seven years, more than doubling its footprint in the nation. It also said it will upgrade more than 200 stores in China over the next three years.

US electric vehicle producer Tesla recently began production of its Model 3 vehicles at its Shanghai Gigafactory and hopes to expand the facility's capacity next year.

Ren Zeping, a vice president and chief economist with developer Evergrande, told a forum on Tuesday that it is a fact that China still lags behind many developed countries in terms of per capita GDP and its urbanization rate, which also means there is huge growth potential. "The best investment opportunities lie in China in the next 10-20 years," Ren said.

"Foreign companies are betting on the Chinese market and implementing their confidence with actual deeds. One significant thing behind that is China's business environment, which keeps improving," Wei stressed.

China jumped to No.31, up 15 spots compared with last year, in the World Bank's ease of doing business rankings report released in October. China's business reforms also placed it among the global top 10 most improved economies in the ease of doing business for a second year, the World Bank said.

Better business environment equals to better productive forces, which functions more effectively than policies, according to Wei. He forecast that China's spot would rank among top 10 within the next three to five years.

A draft regulation on implementing the new Foreign Investment Law was approved recently, which foreign companies care most. Thus, they feel more secure in ramping up investment in China, Wei added.

With detailed measures on protecting foreign investment, the regulation will go into effect on January 1, together with the new Foreign Investment Law.

As China is pushing forward high-quality economic development, the structure of foreign investment has also been continuously optimized, transforming from the labor-intensive sector to high technology and the services industry.

The high-tech sector attracted 240.7 billion yuan ($34.36 billion) of foreign capital in the first 11 months of 2019, up 27.6 percent year-on-year.

It can't be denied that some foreign companies have moved production facilities from China to emerging markets in Southeast Asia. Vietnam, a frontier market in the region, has often been named as a big winner thanks to the ongoing China-US trade war.

But the fact is that - as some foreign chambers of commerce have said - many foreign companies are trying to shift back to China due to potential tariffs that the Trump administration might impose on Vietnam, as well as that Vietnam's incomplete supply chain, according to Wei.

In July, the US imposed a 400 percent import duty on some Vietnam-made steel.


Newspaper headline: Nation to be world’s No.1 FDI destination next year: experts