It is important to explore how China can attract foreign investment, as recent high-level meetings have sent a clear signal that the country's reform and opening-up will advance to a higher level.

Of late, foreign investors have systematically increased their attention on China. They are interested in what important measures China will take to promote high-level reform and opening-up.

The topic of how China can attract foreign investment needs to focus on two core questions: First, do we still need foreign investment? Second, if China needs foreign investment, how can the country attract it?

With regard to the first question, foreign direct investment plays a positive role in economic growth, especially in technology transfer and industrial upgrade. A good institutional environment can stabilize FDI inflows and amplify its positive effects on economic growth.

If we broaden the perspective to encompass 162 countries globally, we find that FDI has had a positive impact on the economic development of all these countries. Therefore, the importance of FDI for economic development is universally applicable.

The structural improvement brought about by foreign investment becomes more evident especially during unstable macroeconomic periods.

As China transforms from a period of rapid growth to one of high-quality development, the role of foreign investment in its economic development will become even more prominent.

A higher-quality institutional framework will also help reduce overall FDI volatility. Countries with high-quality institutional systems can maintain relatively stable foreign investment inflows even during global or regional economic instability.

Specifically, countries with high institutional quality can provide necessary protection and incentives for foreign investment through effective government policies and robust legal frameworks.

Currently, global FDI flows are highly volatile, and the global economic and financial environment is turbulent and uncertain.

Against this backdrop, high institutional quality plays a crucial role in helping China effectively utilize foreign investment and maintain stable development in a volatile environment.

Therefore, China currently needs foreign investment, and the country's high-quality development requires high-quality foreign investment.

With regard to the second question, the key to attracting high-quality foreign investment is to tell China's story well, respect the rules, make foreign investment profitable, and build a solid foundation for attracting and utilizing foreign investment with stable economic growth and a complete industry chain.

It is also necessary to eliminate barriers, promote mutual investment, enhance institutional support through reforms, increase international recognition through openness, boost the confidence of the international community in investing in China, and create a new brand for investing in China.

To further elaborate the point, first, it is necessary to respect the rules and make foreign investment profitable. Capital seeks profit, so the key (to attracting foreign investment) is to create a closer synergy between foreign investment and China's economic development.

When we explore what changes investing in China will bring to foreign investors, we can see that over the next 10 years, the opportunities and potential for China's economic growth will be enormous.

China has always been the largest and most important investment destination that global capital cannot ignore. Therefore, for the global community, investing in China is a crucial step in capturing future global trends and dividends. China remains an essential market that capital cannot overlook.

China's complete industry chain and its transformation and upgrade present significant advantages. In terms of industrial policy, China has a series of important emerging development directions, providing global investors with more possibilities for high returns.

In terms of the global value and supply chain, China will continue to leverage its new national system and joint resources to conquer key technological bottleneck problems, so as to move the country to the higher end of the industry chain.

In terms of midrange to high-end manufacturing, China will also help enterprises, especially small and medium-sized manufacturers, effectively achieve industrial upgrade and transformation by enhancing the high-end, intelligent and green levels of the manufacturing industry chain. It will offer huge opportunities to global investors.

In the digital economy sector, China's speed has attracted global attention. On the one hand, China will further improve normalized regulatory efforts to ensure the healthy development of the digital economy. On the other, China will continue to support the construction of digital platforms, which will create more diverse and innovative digital scenarios to promote daily consumption.

Moreover, latest financial reports from many internet companies, including Pinduoduo, have also garnered global attention. The exceptionally high net profit growth rates of these companies demonstrate the potential of China's integration of its digital and real economies, which will boost global investor confidence in the Chinese market.

China's attractiveness to foreign investment is also increasing. Over the past month, shares traded on the Hong Kong Stock Exchange have outperformed major global assets, with international investors gradually increasing their allocations to Chinese stocks and bonds.

The global bond market has been increasing its holdings of China-related fixed-income products since the fourth quarter of 2023. The Chinese stock market has seen more foreign capital inflows since February this year.

The most important reason for this is the global investor confidence in the steady and positive growth of China's economy and their confidence in the long-term momentum of China's reform and opening-up.

In this process of attracting foreign investment, China's long-term potential cannot be neglected.

Patience is required during this process. Recent policies have emphasized the importance of encouraging patient capital development. Only patience can bring abundant returns, overcome volatility, foster growth, align with the right industrial paths, and seize the benefits of industrial trends.

In the dialogue with foreign investors, it is crucial for us to articulate the long-term direction of China's economic development more clearly, objectively and rationally. China is making systematic and key changes to its policies, and new opportunities are emerging in the process of optimizing resource allocation. Throughout this process, patience plays an essential role.

It is also necessary for the country to eliminate barriers and allow investment to flow in both directions.

First, we need to reduce information asymmetry. Global investors have always paid close attention to China as the nation's potential growth rate remains high.

There might have been a trend of capital retreat, but it was more of a wait-and-see attitude rather than a bearish one. Therefore, we need to eliminate information asymmetry and turn the attention of foreign investors into more practical actions.

Specifically, we can improve the system and enhance policy transparency, including simplifying the approval process, strengthening intellectual property protection, providing fiscal and tax support, and establishing a fair and transparent business environment.

We also need to actively participate in international organizations, hold international conferences and exhibitions to showcase China's achievements in scientific and technological innovation, green development and social governance, and enhance the international community's recognition and trust in China's investment environment.

Notably, we can promote the optimization and upgrade of the domestic industrial chain by guiding FDI into high-tech and environmental protection industries. Optimizing the distribution of FDI in key industries is closely consistent with the national development strategy.

In terms of human resources, we should improve local labor skills through education and training programs to ensure that they can adapt to and master new technologies, thereby improving overall total factor productivity.

Last but not least, we should strengthen investment in building a "Chinese brand".We need to build a better Chinese brand image in the capital market through a strengthening of the information disclosure system and by boosting regulatory compliance and cracking down on violations.

More efforts should also be made to promote the optimization of market value management of listed companies, improve the information disclosure system, strengthen corporate governance, manage market value through measures such as share repurchases and investor education, and encourage the introduction of medium- and long-term funds and patient capital into the market.

This article is a translation of his speech published on the official WeChat account of the China Macroeconomy Forum, a think tank.

The writer is chief economist at ICBC International.

The views don't necessarily reflect those of China Daily.