Foreign Direct Investment Inflow to China Shrinks 5.1%

Foreign Direct Investment Inflow to China Shrinks 5.1%

Foreign direct investment (FDI) into China’s mainland posted at 847.17 billion yuan in the first eight months of the year, down 5.1% from the same period of 2022, the Ministry of Commerce reported Friday.

FDI is generally considered an ownership stake in a domestic company or project made by an investor, company, or government from another nation. Portfolio investments, that is securities such as stock and bonds, are excluded.

Despite the decrease in the amount of yuan invested, the number of new, foreign-financed companies struck 33,154 in the eight-month period, up 33% on year, reported the ministry.

Foreign capital flowing into China’s manufacturing industry reached 239.95 billion yuan in the January through August period, up 6.8% on year, according to official statistics.

Offshore funds flowing into the high-tech manufacturing industry increased by 19.7% on year in the eight-month period, said the Ministry of Commerce.

Foreign capital invested in electronic and communication equipment manufacturing rose by 39.7% on year in the period, while investments into medical equipment and instrumentation manufacturing industry 25.6% respectively, reported officials.

In the high-tech service industry, foreign investment in R&D and design services increased by 57.1% year-over-year, in the first eight months, said the Ministry of Commerce.

FDI into China from the United Kingdom rose by 132.6% on year in the first eight months; from Canada by 111.2%; from France by 105.6%, from Switzerland by 59.2% the Netherlands by 25.3% and from Germany by 20.8%, reported officials.

FDI into mainland China has been closely watched on both sides of the Pacific Ocean due to geopolitical tensions between Beijing and Washington.

“Beijing has repeatedly pledged to attract foreign investment to boost its post-pandemic economic recovery, but foreign countries have increasingly been looking to Southeast Asia instead,” reported the South China Morning Post on Friday.

China’s share of global FDI inflows among emerging markets is forecast to fall to less than 30% by 2027, compared with a historic range of 40% to 50%, said the Economist Intelligence Unit reported last week.

Aggregate FDI flows to Southeast Asian economies, led by Indonesia and Vietnam, are forecast to exceed China’s by 2024, said the Intelligence Unit. #FDI Inflow to China Shrinks 5.1% Naira Devaluation Deepens Economic Crisis in Nigeria