China still a magnet for foreign investment

Men are silhouetted against a video screen with a Nokia logo while posing with Nokia Lumia 820 and Samsung S4 smartphones in this file illustration photograph taken in the central Bosnian town of Zenica, August 14, 2013. [Photo/Agencies]

Reports have run wild that Microsoft plans to close two mobile-handset manufacturing plants in China formerly run by Nokia Corp, cutting about 9,000 jobs.

According to media, an increasing number of foreign firms are set to withdraw from the country. Japanese watch-maker Citizen shut its factory ahead of Chinese New Year while Panasonic, Daikin, Sharp and TDK plan to move back to Japan to promote domestic manufacturing. Uniqlo, Nike, Foxconn, Funai, Clarion, Samsung and other internationally known enterprises are establishing factories in Southeast Asia and India, while scaling back their Chinese operations.

With the economy slowing down, China is losing some labor-intensive manufacturers to lower-cost countries. Microsoft, Nokia and Panasonic have been engaged in low-end manufacturing in China. Meanwhile, Chinese domestic brands have made considerable progress in these areas to compete with international companies.

China remains a strong magnet for global capital, becoming the world's top destination for foreign direct investment last year by overtaking the US for the first time since 2003, the United Nations Conference on Trade and Development revealed.

"There have been structural changes in inflows to China, from manufacturing toward services, and from labor-intensive to tech-intensive." director of investment and enterprise, James Zahn, said.

In January, China recorded $13.92 billion in foreign direct investment, up 29.4 percent from a year earlier, government data showed. Services accounted for two-thirds of inbound investment that month, while high-end manufacturing made up most of the remainder.

With the opening of more sectors and ensuring equal treatment for foreign and domestic firms, China continues to present opportunities for foreign businesses.