US investment in China in sharp decline, as trade war continues to hamper business

American investment into China grew by 24.3 per cent in the January to April period versus a year ago, down from 71.3 per cent in the first quarter

In the month of April, total foreign investment into China rose 6.3 per cent in yuan terms and 2.8 per cent in dollar terms down from 8 per cent and 4.9 per cent in March

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Signs with the US flag and Chinese flag are seen outside a store selling foreign goods in Qingdao in China's eastern Shandong province on September 19, 2018. – China on September 18 announced tariffs on US goods worth $60 billion in retaliation for President Donald Trump's decision to slap duties on $200 billion in Chinese products next week. Photo: Agence France-Presse

Published: 6:21pm, 16 May 2019Updated: 2:16pm, 26 Sep 2019

American direct investment in China grew by 24.3 per cent in the January to April period compared with the same period last year, a sharp deceleration from the 71.3 per cent growth in the first quarter of 2019, the Chinese Ministry of Commerce announced on Thursday.

The deceleration implies a sharp decline in foreign direct investment (FDI) in April, though the ministry did not release figures for the month alone.

The decline in yuan terms comes as the ongoing trade war between the world’s two biggest economies led to a spike in tensions over the past week, which has threatened to upend commercial relations.

In dollar terms, US investment growth in China fell to 3.5 per cent over the first four months of the year, compared to 3.7 per cent in quarter one.

Genuine bundles of Chinese 100 yuan banknotes and US$100 banknotes are arranged for a photograph. Photo: Bloomberg

The Ministry of Commerce (Mofcom) figures show that China’s overall inbound FDI growth fell to 6.4 per cent, worth 305.24 billion yuan (US$44.36 billion) in the January to April period. Over the first quarter, on a year-on-year basis, FDI growth was 6.5 per cent.

In the single month of April, total FDI into China rose by 6.3 per cent in yuan terms and 2.8 per cent in US dollar terms, down from 8 per cent and 4.9 per cent in March, respectively.