About 40 percent of Japanese enterprises in China are planning to expand their business within the country, according to a survey by the Japan External Trade Organization (JETRO). That figure rose recently for the first time in three years.

According to Nihon Keizai Shimbun, Japanese enterprises are expanding their production capacity in China. Panasonic and Rinnai have both constructed new factories in the country, and Nissin Foods Holdings will also soon establish a new production line in China.

A total of 9,726 foreign enterprises invested in China in the first four months of 2017, increasing 17.2 percent year on year. Meanwhile, the actual use of foreign capital fell by 0.1 percent, standing at 286.41 billion RMB (41.7 billion U.S. dollars), according to statistics released by China’s Ministry of Commerce (MOC).

Liu Xiangdong, an associate researcher with the China Center for International Economic Exchanges, acknowledged the divestment from labor-intensive and export-oriented sectors. However, he pointed out that enterprises that meet the demands of Chinese development, such as advanced service firms and high-end manufacturers, will enjoy great opportunities.

MOC statistics indicate that the rapid growth of foreign investment in the high-tech service industry is one of the main features of China’s foreign capital appeal. A total of 36.56 billion RMB (5.3 bIllion U.S. dollars) of foreign investment was poured into this sector in the first four months of 2017, increasing 12.4 percent year on year.

“The rapid growth of China’s advanced manufacturing industry and the ‘Made in China 2025’ initiative will bring more opportunities to Western countries,” said Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation.

Foreign enterprises will take advantage of China’s upgraded consumption to increase their investment, noted Sang Baichuan, dean of the Institute of International Economics at the University of International Business and Economics. China’s reorganized industrial structure and high-end manufacturing industry, including smart manufacturing, will also be a major attraction for foreign investment, he added.

Liu attributed the increase in foreign investment to China’s improving business environment. The country is promoting trade liberalization and facilitating investment to meet the demands of its development. According to Chinese government work report this year, the country will allow foreign enterprises more freedom, further expanding market access for the service, manufacturing and mining industries. The Chinese government will encourage the IPOs of overseas companies, applying the same rules for both domestic and overseas enterprises when it comes to qualifications, standards and government purchases.

Email: tanyuhan@nbd.com.cn