China’s Commerce Ministry Warns of Challenges to Foreign Investment in 2022

China’s Ministry of Commerce has warned that a “complicated” international environment along with rising production costs will pose challenges for stabilizing foreign investment this year even as the government continues its policy of opening-up and makes more effort to improve the business environment.

Foreign direct investment (FDI) in China topped 1 trillion yuan ($158.2 billion) for the first time last year, Chen Chunjiang, director-general of the ministry’s Department of Foreign Investment Administration, said at a Tuesday press briefing. However, factors including the Covid-19 pandemic, the restructuring of global supply chains, and tougher competition among countries to attract foreign capital, are among the headwinds confronting the country, he said. Rising labor, land and raw material costs in the country are adding to the pressure, according to Chen.