China’s foreign direct investment inflows are expected to hit a new record in 2023 and will probably rank first in the world, experts said on Wednesday.

This is because the country’s FDI surge against headwinds last year has indicated foreign investors’ strong confidence in the Chinese economy, while the government’s ramped-up policy efforts are expected to boost economic recovery and expand FDI inflows into key industries, inland regions and major projects, they said.

Their comments came as the Ministry of Commerce said the country’s FDI in actual use hit more than 1.23 trillion yuan in 2022, up 6.3 percent year-on-year. In US dollar terms, the figure was 189.13 billion, up 8 percent year-on-year.

The performance was better than expected, given the domestic and external challenges, especially the growth rate for the manufacturing industry and major foreign investment projects — those with contractual foreign investment of more than $100 million each — being 46.1 percent and 15.3 percent, respectively.

“Amid subdued global FDI sentiments, the robust FDI growth last year indicated foreign investors are upbeat about the supersized China market and its improving business environment,” said Wei Jianguo, a former vice-minister of commerce and vice-chairman of the China Center for International Economic Exchanges.

“China will become more attractive to them, with the wider opening-up and the anticipated rebound in its economic activity following optimization of the COVID-19 measures,” he added.

Wei predicts FDI will grow at two digits to probably reach $220 billion to $230 billion in 2023, surpassing the United States, as the latter faces economic slowdown — and even a recession. China was the second-largest FDI recipient in 2021, behind the US, according to the United Nations Conference on Trade and Development.

In a circular released recently, the State Council said that China will support foreign-funded research and development centers, so that they can use large scientific research instruments, as well as reports and relevant data of major national science and technology programs, in accordance with Chinese laws.

Analysts have widely attributed China’s robust FDI performance to the combined effects of the country’s policy efforts and economic upgrade and expansion, which, they say, have largely offset disruptions from the epidemic and geopolitical issues.

Source: China Daily

Top clean energy equipment manufacturer Longi Green Energy Technology is planning to invest 45.2 billion yuan (US$6.7 billion) to build the world’s largest solar manufacturing base.

The company signed a letter of intent with local governments in China’s Shaanxi province for an expansion project that would allow it to build manufacturing capabilities to produce 100 gigawatts (GW) of solar wafers and 50GW of solar cells per year, according to a filing to the Shanghai Stock Exchange.

The new plants will effectively double Longi’s existing capacity, and the company said in a press release the hub would be the largest solar manufacturing base in the world. The projects, located near the company’s headquarters in Xian, are expected to go into operation in the third quarter of 2024, the filing said.

Wafers are thin squares of polysilicon that are wired into cells and then pieced together into the solar panels that generate electricity from rooftops and giant fields. Longi is the largest wafer maker in the world, with about 105GW of capacity as of last year, according to BloombergNEF. It also had about 35GW of cell-manufacturing capacity.

The world is racing to fight climate change, but accessing solar panels has been a challenge in some markets including the US, as manufacturers were hamstrung in 2021 and 2022 by a rare stretch of increasing material costs for polysilicon – a key material for most panels.

A surge in production of solar equipment could help countries reduce their dependence on fossil fuels and potentially lower power prices.

Prices for wafers and polysilicon have cratered in recent weeks, cutting into producers’ profit margins.

Longi is trying to extend its dominance by using new advanced capacity to reduce costs and consolidate the market, said Dennis Ip, an analyst with Daiwa Capital Markets.

Longi’s shares rose as much as 2.8 per cent in trading on Wednesday. The stock had fallen 33 per cent since June 30.

Source: South China Morning Post

Thailand’s Department of Mineral Fuels has said that a date for talks between Thailand and Cambodia to explore a new petroleum source in the Gulf of Thailand’s Overlapping Claims Area (OCA) should emerge in two months.

A joint technical committee under the foreign ministries of the two countries will start working on details of the talks in two months, said Sarawut Kaewtathip, the director general of the department.

The next Thai administration is expected to push ahead with the talks as parliament’s four year term is due to end in late March. He added that he believed the OCA is likely to be a new petroleum source for Thailand and Cambodia because the site is located near the Bongkot and Erawan gas blocks.

The two gas fields, operated by PTT Exploration and Production (PTTEP), are key sources of gas supply for Thailand.

Thailand has imported more costly liquified natural gas for use in power generation, following a drop in domestic gas supply in the Gulf.

This is a major reason why the power tariff, which is used to calculate electricity bills, has soared to a record high, said Kurujit Nakornthap, executive director of the Petroleum Institute of Thailand.

Thailand and Cambodia were both affected by COVID-19 and the global energy price crisis, so this year would be an appropriate time for the two countries to work together to find a new petroleum site. He said.

The OCA talks started in 2001 but a conclusion has not been reached since then.

The department organised an auction for licenses for three offshore petroleum exploration and production sites in the Gulf.

Deputy Prime Minister Supattanapong Punmeechaow prompted authorities to speed up a new onshore petroleum auction as part of state efforts to deal with the impact of high energy prices.

Mr Sarawut said the department needs to carefully select areas to ensure they are not in forests, in order to avoid conflict with environment activists.

Montri Rawanchaikul, chief executive of PTTEP  said he believes a new onshore petroleum field will be found in northeastern Thailand where the company’s Sinphuhorm gas field is located.

Source: Bangkok Post

Hong Kong property-market insiders see signs of mainland China residents returning to the housing market after the reopening of the border, although a full recovery is expected to take months amid high interest rates.

Mainlanders have started to buy homes in Hong Kong again, with interest concentrated in luxury properties so far, Victor Tin, executive director at Sino Land, told the Post.

“Luxury homes are seeing an earlier kick-off,” Tin said. “Later when the border reopening is further relaxed, there may be even more mainland buyers coming, boosting other kinds of properties.”

For example, mainlanders bought three of the six flats sold at St George’s Mansions in Ho Man Tin, a luxury project jointly developed by Sino and CLP Group, in the first 10 days of this year, Tin said.

The three flats sold for around HK$300 million (US$38.41 million).

In west Kowloon, a mainland buyer forked out HK$166 million for eight flats at Grand Victoria on January 12, Tin said. Sino and three other companies developed the project.

In the pre-pandemic year of 2019, buyers with mainland China backgrounds accounted for 8.4 per cent of total home sales in Hong Kong, according to Midland Realty. Buying by mainland Chinese peaked in 2011 at 11 per cent of all homes, or 30.2 per cent of new homes.

Annual transactions by buyers who were not Hong Kong permanent residents or companies fell by about 76 per cent during the pandemic, according to Inland Revenue Department statistics cited by Midland Realty.

Source: South China Morning Post