Brief introduction to part of China’s overseas cooperation in the first half of 2017

by+Flora+Zhao

Editors note： During the Regular Press Conference of the Ministry of Commerce on July 13， 2017， Chinas assimilation of foreign investment， Chinas outward investment and cooperation， and the concentrated investigation work against the business owners in the first half of 2017 were released.

Chinas assimilation of foreign investment in January - June

In January - June 2017， 15，053 newly-established foreign-invested enterprises were approved， with an increase of 12.3% year on year； the actual use of foreign capital reached 441.54 billion yuan， decreasing 0.1% year on year. In June， 2，894 newly-established foreigninvested enterprises were approved， with an increase of 14.3% year on year； the actual use of foreign capital reached 100.45 billion yuan， increasing 2.3% year on year.

In January - June， the scale of Chinas assimilation of foreign investment was basically steady， and the structure was being continuously optimized， keeping the trend of gathering to the high-end industries. There were mainly three features specifically：

Firstly， assimilation of foreign investment in different industries was stable， and the assimilation of foreign investment of the manufacturing industry realized growth. In January - June， the actually utilized FDI was 128.6 billion yuan， up 3% year on year， accounting for 29.1% of the total. Among these， that in general equipments manufacturing was up 14.4% year on year， that in petrochemical engineering， coking and nuclear fuel manufacturing was up 329.4% year on year， and that in chemical raw material and chemical products manufacturing was up 38.4% year on year.

The actually utilized FDI in service sector amounted to 309.99 billion yuan， taking up 70.2% of the total. Among these， that in the production and supply of electric power， gas and water increased 100.2% year on year， that in farming， forestry， animal husbandry and fishery services increased 76.8% year on year and that in construction and related engineering service increased 56.3% year on year.

Secondly， assimilation of foreign investment in hitech industries grew rapidly. The actually utilized FDI of high-tech manufacturing was 34.97 billion yuan， up 11.1% year on year， among which， that of computer and office equipment manufacturing， spacecraft and equipment manufacturing and pharmaceutical manufacturing increased 178.9%， 149.4% and 10.3% year on year respectively.

The actually utilized FDI in hi-tech service sector reached 64.72 billion yuan， up 20.4% year on year. Among these， that in information service， R&D and design service， and scientific achievement transformation service grew by 35.6%， 13.9% and 46.3% year on year.endprint

Thirdly， the main sources of investments from Hong Kong， Taiwan， and Japan grew rapidly. In January - June， the actual input from the top ten countries and regions amounted to 420.09 billion yuan， taking up 95.1% of Chinas total actual use of FDI. Among these， the actual input value from Chinas Hong Kong， Chinas Taiwan and Japan grew by 10%， 48.4% and 5.4% respectively year on year （including their investment through free port）.

Chinas outward investment and cooperation in the first half year of 2017

In January - June 2017， Chinese domestic investors carried out non-financial overseas direct investment in 3，957 overseas enterprises across 145 countries and regions， with an accumulative investment of US$ 48.19 billion， down 45.8% year on year. The completed turnover of contracted projects overseas was US$ 67.28 billion， up 1.9% year on year； the newly-signed contracts value reached US$ 123.78 billion， up 24.2% year on year. The labor service personnel dispatched overseas reached 219，000. At the end of June， the labor service personnel dispatched overseas amounted to 917，000.

Chinas outward investment and cooperation in the first half of 2017 presented the following characteristics：

Firstly， investment and cooperation with countries along “Belt and Road” was steadily promoted. In January - June， the Chinese enterprises conducted new investment to 47 countries along “Belt and Road”， amounted to US$ 6.61 billion， taking up 13.7% of the total in the same period， and 6 percentage points higher than in the same period last year. The newly-signed contracts value in the countries along “Belt and Road” was US$ 71.42 billion， accounting for 57.7% of the total and 6.1 percentage points higher than the same period last year； the complete turnover reached US$ 33.07 billion， accounting for 49.2% of the total and 2.7 percentage points higher than the same period last year.

Secondly， the decreasing amplitude of foreign investment was narrowed and the industrial structure was continuously optimized. In January-June， foreign investment mainly flew to leasing and business service， manufacturing industry， wholesale and retail trade， information transmission， software and information technology service industry， accounting for 28.3%， 18.3%， 12.7% and 11.4% of the total investment amount respectively in the same period. Foreign investment of real estate industry decreased 82.1% year on year， accounting for 1% of the total investment amount in the same period. In June， foreign direct investment reached the highest value since December 2016， US$13.6 billion， decreasing by 11.3% year on year. The decreasing amplitude was further narrowed， with an increase of 65.5% month on month， realizing positive growth for the second consecutive month.endprint

Thirdly， there are many newly signed big projects of contractual foreign projects and the industrial distribu-tion was relatively concentrated. In January - June， the newly signed contracts of foreign contract projects are mainly focused on the communication and transportation， building and electric power engineering industry， accounting for 25.3%， 25.3% and 18.8% respectively. There were 359 projects with the newly-signed contractual value of more than US$50 million， 12 more than in the same period last year， adding up to US$105.62 billion， accounting for 85.3% of the newly signed contractual value.

Fourthly， the construction of the overseas trade and economic cooperation zone was promoted steadily， promoting common development between China and the host country. In January - June， Chinese enterprises accumulatively invested US$2.3 billion in overseas trade and economic cooperation regions， with a total value of US$8.77 billion. By the end of June， Chinese enterprises have been building 97 overseas trade and economic cooperation zones in 44 countries and regions， accumulatively investing US$28.99 billion， attracting 3，825 enterprises to enter into the zone， paying US$3.09-billion tax revenue to their host country and creating 240，000 employment positions to the local regions.

In January - June， Chinas foreign investment dropped. There were mainly three reasons except a relatively higher cardinal number in the same period last year： firstly， the domestic economy was steadily better and better. In the first half year， Chinas economy continued a recovery and turnaround momentum， lifting the confidence of investors and leaving more funds within China. Secondly， the uncertainties of international environment increased. Regional conflicts took place frequently， terrorism spread， and some countries tightened foreign investment access exerting a negative impact on Chinas foreign investment. Thirdly， the effect of adjustment measures appeared. Since the end of 2016， the Ministry of Commerce， together with relevant departments of the State Council， has strengthened plausibility and compliance check of foreign investment when promoting the foreign investment facilitation. The irrational foreign investment was effectively restrained， the foreign investment structure was further optimized， and the for- eign investment in industries such as real estate， hotel， film cinema， entertainment industry and athletic club decreased sharply.

The concentrated investigation work against the business owners in the first half of 2017endprint

In the first half of 2017， the Ministry of Commerce did the concentrated anti-monopoly investigation work against business runners according to law， protected the fair competition of market， cultivate legal， convenient and international business environment and promote the sound development of market economy. By the end of June， MOFCOM received 202 anti-monopoly declarations， put 172 cases on record， concluded 156 cases and approved 1 case with conditions.

The cases mainly have the following features： firstly， major and complex cases increased. Among the concluded cases， there were 43 complicated cases， accounting for 28% of the total cases， increasing by 9 percentage points year on year. There were 29 cases with more than 10-billion-yuan transaction amount， accounting for 20% of the total cases， increasing by 13 percentage points year on year. Among these， there were 6 cases with more than 100-billion-yuan transaction amount， and the transaction scale showed a large-sized trend. Secondly， the merger and acquisition of manufacturing industry still ranked the first. There were 83 manufacturing cases， accounting for 53% of the total cases， marking the industry with the most caseload， up 12 percentage points year on year. Among these， the merger and acquisition in the fields such as semiconductor， automobile and parts grew fast. The year-on-year increase of cases in the service industry such as e-commerce， culture and entertainment was obvious. Thirdly， the overseas merger and acquisition was constantly active. There were 67 overseas interenterprise merger and acquisition， accounting for 29% of the total cases， with an increase of 15% year on year. The United States， the EU and Japan were still the main body of overseas merger and acquisition.

The Ministry of Commerce performs strictly according to law and does a good job in antimonopoly review. It has achieved results from the following aspects：

Firstly， it has helped to maintain fair competitions in the market effectively. For example， the conditional approval on Dow DuPont Merger Case according to the law maintains the fair competition of rice agricultural products market， which can protect the interests of farmers and other downstream consumers and maintain fair competitions in relevant markets.

Secondly， it has strengthened the conditional supervision and investigation without declaring according to law. Four cases that did not declare according to law were given public punishment， which maintained the authority of Anti-monopoly Law and enhanced the awareness of enterprises declaration according to law. Besides， it has done a good job with cases under conditional supervision， ensuring that the review approval of previous cases under conditional supervision is effectively observed and law enforcement is in effect.endprint

Thirdly， it has promoted the systematization and standardization of the review by strengthening the construction of anti-monopoly system， paying close attention to the revision of the Anti-monopoly Law， completing the draft of the Centralized Review of Operators， further improving the rules of review and promoting the standardization and systematization of the review.

Fourthly， it has further improved the efficiency and quality of law enforcement by improving the quality of case handling， comprehensively using legal and economic analysis and other means of review， strengthening the assessment of market competition and promoting the specialization. It provides pre-filing services， guides enterprises to finish the declaration and promotes the facilitation of declaration. It has speeded up the filing and made clear what materials to add all at once within 5 days after receiving declaration materials. The average filing time of the first half year is reduced by 19% than that of the last year. The review time is further shortened by an average of 11.6% compared with that of last year. 95% of simple cases are concluded in the preliminary review phase （30 days）.

Fifthly， it has strengthened anti-monopoly international exchanges and cooperation. It has adapted to the international trend of antimonopoly and actively carried out exchanges and cooperation. Moreover， it has signed an anti-monopoly memorandum with the British Competition and Market Authority， carried out law enforcement cooperation with the law enforcement agencies from United States， the European Union and other six countries or regions on more than 10 cross-border mergers and acquisitions cases， and held China-EU Week Seminar on Competition Policy with the EU Competition Secretary. It has actively promoted the competition and cooperation of BRIC and continuously improve the level of cooperation. It has actively participated in the formulation of international competition rules， paced up the negotiation of competition issues for RCEP and other Free Trade Agreement and promoted the cooperation to deal with international trade and investment in the monopoly.

In the second half of the year， in the face of the new situation and problems， the Ministry of Commerce will better adapt to the new normal state of economic development， firmly establish and implement the new development concept， focus on solving problems， continue to improve the relevant legislation， do a good job in the review of major cases， investigate and deal with cases without declaring according to law， strengthen the supervision and implementation of conditional cases， further improve the quality and efficiency of cases， effectively protect fair market competition， create a business environment of legalization， facilitation and internationalization， and promote healthy and stable development of market economy.endprint