People visit the 2022 China International Fair for Trade in Services (CIFTIS) at the China National Convention Center in Beijing, capital of China, Sept. 5, 2022. [Photo/Xinhua]

The structure of China's foreign investment will continue to improve, with more capital expected to flow into the country's service sector, according to an expert economist during an exclusive interview with China.org.cn.

Pan Yue, a professor from the School of Economics, Xiamen University, said that foreign investors pay close attention to the opening-up of China's service sector, which represents the largest share of the economy and serves as the main driver of the country's growth.

Data from the National Bureau of Statistics showed the added value of China's service sector exceeded 46.5 trillion yuan ($6.7 trillion) in the first three quarters of 2022, accounting for 53.5% of the country's GDP.

Pan predicted robust growth of foreign investment in the service sector as the country has reaffirmed its commitment to high-level opening-up and introduced a series of incentives.

For example, the annual Central Economic Work Conference held in mid-December last year emphasized greater efforts to promote the opening-up of the modern service sector, she said.

The latest data released by the Ministry of Commerce showed that foreign direct investment (FDI) into the Chinese mainland, in actual use, rose 9.9% year on year to nearly 1.16 trillion yuan in the first 11 months of 2022. In U.S. dollar terms, the inflow increased 12.2% year on year to $178 billion.

FDI in the service sector came in at 842.6 billion yuan during the period, accounting for 72.9% of the total.

For years, China's fast-growing service sector has been a magnet for overseas investors looking for opportunities in the world's biggest emerging market. During the country's 13th Five-Year Plan period (2016-2020), foreign investment in the service sector grew at an average annual rate of 4.4%, accounting for more than 70% of the total foreign investment in actual use.

Pan said the meeting also sent positive signals to foreign investors regarding the country's policy direction and improvements to its business environment.

"The meeting said China will actively seek to join high-standard economic and trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Digital Economy Partnership Agreement, and urged efforts to deepen reforms in related domestic fields," she explained.

"To create a business environment more conducive to foreign investment, the meeting emphasized the need to ensure national treatment for all foreign-invested enterprises, foster a fairer market environment for multinationals, and strengthen protection of intellectual property rights and the legitimate rights and interests of foreign investors," she added.

Pan said that the measures introduced by the meeting will fuel Chinese modernization by helping create a new development pattern, boosting consumption upgrading, and ensuring the safe and stable performance of industrial and supply chains.

By promoting trade and investment liberalization and facilitation, China will make greater contributions to advancing bilateral, regional and multilateral cooperation, enhancing international macroeconomic policy coordination, and creating an international environment for development, she said.

In addition, China firmly supports other developing countries in accelerating development, which will in turn drive the global economic recovery and structural upgrading, Pan added.

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