China still red hot for foreign investment, despite US tax cut

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100 US dollar bill and 100 China yuan banknote.

China is still an attractive hot spot for investment, said Gao Feng, spokesman for the Ministry of Commerce, in responding concerns of potential capital outflows due to massive tax cuts in the United States, Yicai.com reported.

Gao thinks the tax policy is an important factor, but not a decisive one in terms of attracting foreign investment. The destination country’s economic stability, market potential, factors of production and business environment, all affect the investment decisions of enterprises.

China’s relatively complete supply chains, its high-quality labor force, considerable GDP growth and massive consumer market, still make it an attractive place for foreign companies to park their money, he added.

Meanwhile, Gao also expressed concerns about US tax reform, in that it could cause an additive effect combined with previous interest rate hikes, leading to an inevitable impact on global capital flows.

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