Not just a big market but an innovation source

The robust growth came against a backdrop of multiple external and internal negatives, including geopolitical tensions and industrial and supply chain inconveniences caused by the recent domestic COVID-19 resurgence.

Experts and business leaders said thanks to China's unwavering commitment to opening-up and reform, as well as its firm pursuit of innovation-driven high-quality development, the domestic market has been expanding while its business environment constantly improved and its weight in global industrial chain increased. It is an ongoing process and that makes the nation increasingly attractive to foreign investors, they said.

The nation should adhere to such development approach and make more efforts to propel development of high-tech and services, in order to create more market opportunities for foreign investors and boost FDI, they said.

They also predicted the nation can sustain high-level FDI inflows throughout the year this way despite various headwinds.

"Some people may worry that foreign investment will flow out of China. Such worries are groundless, as the FDI growth has shown us," said Wang Jingwen, director of the Macro Research Center affiliated to the China Minsheng Bank Research Institute.

"There is consensus among foreign enterprises that investing in China is investing in the future," he said.

The US additional tariffs on Chinese goods have increased enterprises' costs of buying products from China, and some countries may seek to reconstruct industrial and supply chains to reinforce their supply stability. Despite that, foreign investors remain enthusiastic about investing in China after weighing their options, Wang said.

Data from the MOC showed the number of the newly established foreign-funded enterprises in China has been rising over the years. The figure rose to 48,000 in 2021, up 23.5 percent from a year ago.

The paid-in FDI in China exceeded 1.1 trillion yuan in 2021, increasing nearly 15 percent year-on-year.

Although some foreign-funded enterprises have relocated their production facilities to other regions outside China in recent years, the number of such enterprises is quite limited and many more foreign enterprises still chose to keep investing in China, analysts said.

Zhang Jianping, head of the center for regional economic cooperation at the Chinese Academy of International Trade and Economic Cooperation, said that while many foreign companies eye the nation's huge domestic market potential and, therefore, increase investment in China, a rapidly growing number of foreign companies invest more in China because they are impressed by the country's rising position in the global supply chain.

For those companies, China can offer an environment that facilitates development, efficiency and close coordination from upstream and downstream industries, he said.

He also observed much of FDI in China flows into services, thanks to higher-level opening-up in the sector, while high-tech industries and high-end manufacturing have also attracted increasingly more foreign investment.

That will help propel the Chinese economy's transition toward the higher value-added end to ensure stable economic upgrade and growth, he said.