US Investments
(Photo: REUTERS/Brendan McDermid)

American investors are coming to China to invest despite the ongoing trade war. The country's vice-commerce minister Wang Shouwen said that outpouring of investments from the U.S. only means that businesses were not deterred by the issues on the trade war and they simply trust China's blossoming economy.  

According to The South China Morning Post, Beijing recorded a total of CN¥242.28 billion or around US$36 billion foreign investments in the first three months of this year alone. This figure is 6.5 percent higher compared to last year's record within the same period. Based on the data, the manufacturing sector garnered the most investments with CN¥75.36 billion or US$11.2 billion.

"Even though the flow of international capital has been decelerating, foreign investment in China has maintained stable growth," Shouwen said in a statement. "This shows that international investors are confident in China's economic growth, and are giving approval of the investment environment in China."

The VP commerce minister added, "The increasing investment from the United States highlights confidence in China's economic growth." He stressed that the ongoing trade war has no effect on the economy based on the data of investments this year.

Likewise, Gao Feng, the Ministry of Commerce spokesman, released a preliminary data last week and it showed that US investments in 2019's Q1 increased by 71.3 percent. The bulk of these stakes probably came from big companies including Tesla and BMW.

With this latest development, it was stated that Beijing is keen on attracting more foreign investors to the country and they are hoping that major companies that have already started their business in China would remain as the economy continues to stabilize and grow.   

As the first step to gain more investors, China is rushing the works on amending its foreign investment regulations especially the part that will make it illegal for local governments to forcibly transfer technology. This is the item that foreign investors are complaining about and China is willing to fix this rule for the benefit of all parties.

Meanwhile, the US-China trade talks are resuming this week and the final decision on a trade deal is expected to be made. Wang Shouwen and chief trade negotiator Liu He will meet with the US trade representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in Beijing for the negotiations.