China will continue selective opening-up

Significance

FDI is supporting China's domestic recovery and its role as a global growth engine. However, in a 'Five-Year Plan for the use of FDI' issued last October, China's government expressed a cautious view on the prospects for inbound FDI, pledging to improve its quality and keep its quantity stable.

Impacts

• Services, high-tech manufacturing and R&D will be the major areas of FDI growth in China.
• The rising stock of FDI in China means firms in developed countries will continue pressing their governments to avoid upsetting Beijing.
• As more FDI in China targets the domestic market, Vietnam, Bangladesh, Indonesia and the Philippines offer alternative export platforms.