FOREIGN companies continue to invest more in China even after U.S. President Donald Trump called on U.S. firms to look elsewhere, as the rising spending power of 1.4 billion people proves too hard to resist.

Companies from Tesla Inc. to Walmart Inc. are expanding operations in the world’s second-biggest economy, joined by counterparts from South Korea, Japan and Europe. That is helping offset the departure of goods manufacturers that have had to rethink supply chains after U.S. tariffs made their products more expensive.

Foreign direct investment (FDI) into China rose nearly 3 percent in the first nine months of 2019 from a year earlier, according to the Ministry of Commerce on Friday, the same pace as 2018’s increase. While the U.S. outstripped that increase last year, investment has dropped off since Trump became president.

Almost 75 percent of China’s inbound investment is now into services, utilities and other sectors aimed at the domestic market, said David Dollar, a former US Treasury attaché in Beijing. If anything, the trade conflict is encouraging companies to ensure they have a China base, he said.

Tesla is eyeing mass production out of its first factory outside the US in a plant near Shanghai for which the automaker has received as much as US$521 million in loans from Chinese banks.

LG Chem Ltd., the world’s second-biggest manufacturer of lithium-ion battery cells and said to be one of Tesla’s initial suppliers for its made-in-China Model 3 cars, said in October it plans to invest about US$430 million in its Chinese business. In June, it teamed up with Geely Automobile Holdings Ltd. on a joint venture to produce electronic vehicle batteries.

“China is a focal point for our battery investment,” LG Chem spokesman Yoo Won-jae said this month. (SD-Agencies)