China is making every effort to stabilize and attract foreign investment at all costs.

Recently, significant news has been delivered, sending a strong signal.

Observant people have noticed that since last August, the country has elevated foreign investment to the level of "enhancing political positioning," with frequent major moves and a strong sense of urgency.

Many areas that were previously closed are now open.

Two highly symbolic events occurred this month.

First, China officially opened up to wholly foreign-owned hospitals, and at one go, identified nine pilot areas, including Beijing, Tianjin, Shanghai, Guangzhou, Shenzhen, Nanjing, Suzhou, Fuzhou, and the entire island of Hainan.

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As a result, the entry threshold for wholly foreign-owned hospitals has been completely demolished, and the Putian system has met its strongest competitor in this life.

Second, the National Development and Reform Commission issued the latest version of the "Negative List for Foreign Investment Access," completely achieving zero negative lists for foreign investment in the manufacturing industry in China.

The last two "fortresses" restricting foreign investment in manufacturing have been broken: "Publication printing must be controlled by the Chinese side"; "Prohibition of investing in the application of traditional Chinese medicine slice technology and the production of proprietary prescription products of Chinese patent medicines."

You see, one involves the management of ideology and publication printing, and the other involves the key field of proprietary prescription of Chinese patent medicines, which are also open to foreign investment, full of sincerity.

Why is it that on one hand, foreign companies like IBM are pulling out of China by resolutely laying off a large number of employees, while on the other hand, foreign capital like Samsung is heavily invested in the Eastern power, continuing to grab the layout?

Why is Tesla allowed to enter Shanghai, the Jiangsu government procurement list, and why are wholly foreign-owned hospitals finally completely open, with unconventional things happening again and again?

A far-reaching battle for foreign investment has already begun, fierce "pulling" is unfolding, the pattern of foreign investment is undergoing a major reshuffling, and a huge chain reaction has started.

How important is foreign investment to the country now?

The strength is unprecedented.

Since this year, there have been at least six high-level meetings at the national level to discuss, study, and deploy foreign investment-related work: On February 23, the State Council pointed out that stabilizing foreign investment is an important focus of economic work this year, and to consolidate the confidence of foreign investment in China's development; 11 days later, the "Government Work Report" at the National "Two Sessions" mentioned consolidating the basic plate of foreign trade and foreign investment, and cultivating new advantages in international economic cooperation and competition; On March 19, the General Office of the State Council issued the "Action Plan for Solidly Promoting High-Level Opening Up and Attract More Foreign Investment" specifically, proposing 24 specific measures; On June 26, the State Council again proposed to increase efforts to attract and utilize foreign investment, and to stabilize foreign investment through multiple measures; Just four days later, He Lifeng, a member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, presided over a foreign investment work symposium, emphasizing "to accurately grasp the new situation faced by the current investment attraction work, further enhance confidence and determination, and further do a good job in attracting and utilizing foreign investment"; The 20th Central Committee held in July, it is extremely rare to mention "deepening foreign investment... management system reform."

Why is foreign investment so important?

Many people don't know a set of data, foreign-funded enterprises account for a very small proportion, but it is extremely important.

In the 40 years of reform and opening up, foreign investment once accounted for less than 3% of the number of Chinese enterprises, providing 1/10 of urban employment, contributing 1/5 of tax revenue, 1/4 of total industrial output, and nearly 1/2 of total import and export volume.

Although these proportions have declined in recent years, they are still not negligible.

Moreover, the issue of foreign investment is by no means just a financial issue.

Ma Yu, the director of the Foreign Investment Expert Center of the Ministry of Commerce and a foreign investment expert, pointed out sharply: "Foreign investment is directly connected to almost all the world's most advanced production factors, including capital, talent, technology, products, organization, management, rules, standards, and so on.

More importantly, foreign investment is related to our closest economic and trade ties with the international market."

The reason why China can smoothly integrate into the international division of labor since the reform and opening up, and establish the most complete modern industrial system in the world, becoming a veritable "world factory," is that the contribution of foreign investment is extremely huge and indispensable.

At present, China is facing the haze of foreign investment withdrawal, and some worrying news is also constantly coming.

Last month, IBM's China region suddenly carried out a large-scale layoff, and in less than 3 minutes, more than 1,000 Chinese employees were suddenly laid off, staging a shocking retreat.

It should be noted that IBM entered the Chinese market as early as 1984, and has been sought after for 40 years, even Huawei has to call it a "teacher."

The news is indeed surprising.

In addition, Shanghai SAP is also at the center of the layoff storm, and it is said that the number of layoffs is also more than 1,000 people.

Looking at the trends of these years, one can perceive the subtle changes of foreign investment, especially the giants of technology: In 2023, Dell announced its withdrawal from the Chinese industry chain, and will completely stop using chips made in China; In 2023, Amazon's Kindle announced the cessation of e-book business in the Chinese region; In 2023, the world's largest AI chip company Nvidia announced its withdrawal from the Chinese market; In 2024, the enterprise status of Hewlett-Packard Technology (Shanghai) Co., Ltd. changed from existence to cancellation; Also this summer, Microsoft announced that it will close all offline authorized stores in China, only retaining the official website mall and JD flagship store... Apple, Google, Amazon, HP, Nvidia, IBM...

These technology benchmarks have all spread the news of withdrawal/transfer/adjustment of layout.

There are many reasons, such as the domestic government and state-owned enterprises in China have set off a wave of domestic replacement, which has caused IBM to lose a large part of the market.

In 2023, IBM's revenue in the Chinese market fell sharply by nearly 20%.

At the same time, Apple's revenue in the Greater China region fell from 19.31% to 17.53%, and iPhone sales in the Chinese market fell out of the top five; Nvidia also fell sharply from 24.57% to 9.56% due to export controls across the Pacific.

The key reason is that some European and American countries have implemented policies of "decoupling and breaking the chain" in recent years, trying to reconstruct a "de-China" global industrial chain supply chain, and some foreign investment has been affected by this to withdraw or adopt the "China+1" strategy to adjust the layout.

The situation of foreign investment has also become unprecedentedly complex.

In 2023, China's foreign investment experienced its first decline in nearly a decade, with a drop of about 8%.

In January of this year, the actual use of foreign investment was -11.7% year-on-year, -19.9% in January-February, -26.1% in January-March, -27.9% in January-April, -28.2% in January-May, -29.1% in January-June, -29.6% in January-July, and -31.5% in January-August...

This is the first decline in actual use of foreign investment in recent years since last year's January-June, with a decline of 2.7% year-on-year, followed by 15 consecutive months of decline.

Increasing efforts to retain and attract foreign investment is particularly urgent and important at present.

The country is making every effort to see this point, and taking the work of foreign investment as a key "bull's nose."

Against this background, the comprehensive opening of wholly foreign-owned hospitals this time is a "key move" to attract foreign investment.

You know, foreign investment is very interested in entering the Chinese medical field alone.

In the first half of this year, while the actual use of foreign investment in China has declined sharply, the foreign investment in medical care, pharmaceuticals, and medical equipment has surged by as much as 87%.

It is obvious that the potential demand for high-quality medical services in the Chinese market is extremely huge and has not been met.

In recent years, the number of people going abroad for medical treatment in China has grown rapidly, going to the United States for cancer treatment, going to Japan for physical examination, and going to South Korea for beauty have all become huge industrial chains.

If top foreign hospitals can be opened in China, many patients will not have to go abroad, saving a lot of expenses.

Recently, many people have found that it is now difficult to buy the commonly used imported drugs in public hospitals, because the National Medical Insurance Bureau has taken the lead in centralized procurement, significantly reducing the procurement price of drug companies, which has also led to the advantage of cheaper generic drugs.

The arrival of foreign hospitals in China can also bring a richer choice of drugs, especially those imported drugs that are difficult to buy domestically.

In fact, China's opening up of wholly foreign-owned hospitals to foreign investment is also a process that has come to fruition, and the pilot work in related provinces and regions has officially started in 2014, but there has always been an invisible threshold, and the progress has not been smooth.

For a long time, foreign investment has basically opened hospitals in China through joint ventures rather than wholly-owned.

The number of such hospitals, as of 2021, was only 302.

Compared with the total number of more than 1.07 million medical and health institutions in the country, it is a drop in the bucket.

With the medical field becoming more open to foreign investment and covering a wider range, we can expect more foreign-owned hospitals to be established, especially top transnational chain hospitals, such as Mayo, Hopkins, Jiahui, Raffles... and the accompanying international pharmaceutical companies, such as Johnson & Johnson, Roche, Merck, AbbVie, Bayer, etc.

Excellent domestic doctors and nurses may also usher in more high-paying employment opportunities, and there are more choices for job-hopping.

The "medical dual-track system" may gradually take shape, and patients have more choices: one is to save money and go to public hospitals for low-cost treatment; the other is to go to foreign hospitals to enjoy better services and use more expensive imported drugs.

On the other hand, the comprehensive opening of the manufacturing industry to foreign investment also forms a strong attraction, and in the final analysis, it is also because of China's huge market.

Whether it is medical machinery, high-precision technology, 5G applications, etc., there is a huge demand.

And an important feature of the manufacturing industry is transportation costs.

Why does Tesla set up factories in Shanghai?

Why is it difficult for Apple to completely leave China?

In fact, it is the same.

In addition, China also has a huge talent dividend, especially the dividend of engineers.In 2023, the structure of China's actual use of foreign capital saw a continued upward trend in advanced manufacturing despite the headwinds: high-tech manufacturing industry, a year-on-year increase of 6.5%; electronics and communication equipment manufacturing industry, a year-on-year increase of 12.2%; high-tech industries attracted investment of 423.34 billion yuan, setting a historical high in scale, accounting for as much as 37.3%...

In other words, foreign capital is entering China in a new way.

Especially in manufacturing and service industries, there is still a broad market prospect and development space.

For example, in recent years, Samsung of South Korea has been continuously closing its mobile phone, computer, and TV factories in China, choosing India and Vietnam as the "successors."

However, at the same time, Samsung is also accelerating the layout of high-tech industries such as chips, OLED displays, and new energy batteries in China, and the proportion of total investment in this area has increased significantly, from 50% to 80%.

Several forces are simultaneously stirring up the foreign capital pattern, with decoupling, industrial transfer, structural upgrading, and domestic substitution...

The result of this game is a major reshuffling of the foreign capital pattern.

Many foreign capital also see the opportunities in China and are making frequent moves.

In Jiangsu, Samsung Semiconductor's global distribution center moved and opened in Suzhou Industrial Park, taking only 4 days from signing the land contract to obtaining the construction permit, and only more than 400 days from the start of construction to the completion of the project; in Zhejiang, the investment cooperation signing ceremony of the Yokohama Rubber Qiantang project from Japan was held in Hangzhou recently, with a planned total investment of about 500 million US dollars, which is the largest single foreign-funded manufacturing project introduced by Hangzhou in recent years.

... During the pandemic, foreign capital has been investing in China one after another, setting a historical high point for foreign capital entering China.

This also fully demonstrates the attractiveness of the Chinese market and the resilience of the Chinese economy.

In order to reassure foreign capital, our country has also racked its brains to introduce a series of regulations and policies in the past two years to create a fair competitive environment.

Whether it is the complete zeroing of the negative list for foreign investment in manufacturing, or the opening up of foreign-funded hospitals, it is essentially because China wants to break the closed situation with openness, and to break the "small courtyard and high walls" blockade with a more open attitude.

The more open, the more powerful, and the stronger.

At the same time, if we want the foreign market to embrace us, China must also take the lead, break various restrictions, and show sincerity and determination.

With the further deepening of opening up to the outside world, the future direction must be - transparent, stable, and sustainable.

The market situation is changing dramatically, but China's embrace towards foreign capital must be unswerving.

It is important to know that China is still the largest market in the world, and is continuously deepening the construction of a unified national market, which is our biggest confidence and a unique trump card.

Countless opportunities and wealth are flowing in the reshuffling of the foreign capital pattern, and are reshaping.

Some people are lost, and some people are reveling.