七部委下发通知：鼓励外商投资企业境内再投资

Core Viewpoint - The issuance of the notification by multiple government departments is a timely and necessary measure to encourage foreign direct investment (FDI) reinvestment in China, addressing the decline in global FDI and the need for stability in foreign investment [1][2]. Group 1: Current FDI Situation - Global FDI has been shrinking for two consecutive years, with a projected decline of 11% in 2024, influenced by geopolitical tensions and the deepening of major power rivalries [1]. - In China, from January to May this year, there were 24,018 newly established foreign-invested enterprises, a year-on-year increase of 10.4%, while the actual utilized foreign capital amounted to 358.19 billion RMB (49.88 billion USD), reflecting a year-on-year decrease of 13.2% [1]. Group 2: Measures in the Notification - The notification includes twelve measures focusing on six main areas: enhancing project service guarantees, optimizing land resource allocation, simplifying relevant procedures, implementing and enforcing support policies, facilitating foreign exchange fund usage, and increasing financial support and innovation [2]. - The notification aims to stabilize foreign investment and is seen as a crucial step in promoting high-level opening-up and modernizing China's production capabilities [2][3]. Group 3: Policy Implications and Recommendations - The notification signals a commitment to stabilizing foreign investment, which is essential for maintaining investment scale amid risks associated with multinational companies' strategies and adverse impacts from U.S. tariffs [3]. - To further support FDI and reinvestment, it is recommended to maintain macroeconomic stability and capital returns, as well as to stabilize the exchange rate, particularly given the current appreciation of the RMB against the USD but lower levels against a basket of currencies [3].