China can count on FDI boost in technology

Significance

China gets to upgrade its industry and the economy, while multinationals are able to exploit considerable business opportunities and build up cross-border technology chains. FDI inflows were impacted by the COVID-19 pandemic, and escalating geopolitical tensions have added a further dampener. Nevertheless, FDI in high-tech industries is holding up well.

Impacts

• China’s high-tech industrial base will expand significantly.
• There will be increasing R&D by domestic and foreign entities in cutting-edge technologies.
• Foreign companies risk being caught up in political confrontations between foreign governments and Beijing.