Foreign direct investment in China drops despite efforts to attract overseas capital
- Commerce ministry blames slow recovery after the coronavirus for 5.1 per cent decline in its foreign direct investment in the first eight months of the year
- Despite Beijing’s efforts to attract investment, other countries are increasingly looking to Southeast Asia
Foreign direct investment in China dropped by more than 5 per cent in the first eight months of the year despite an all-out effort to attract foreign capital, according to official figures.
The Ministry of Commerce, said it had fallen by 5.1 per cent in the first eight months of 2023, year on year, to 847.2 billion yuan (US$117 billion).
The ministry, which has not yet published the number in US dollar terms, said the decline was due to the slow recovery of the global economy and a high base last year.
From January to July, the US-dollar-denominated total had fallen by 9.8 per cent from a year earlier to US$111.8 billion, according to the ministry.
Foreign investment is a market behaviour, and periodic fluctuations are normal
“Foreign investment is a market behaviour, and periodic fluctuations are normal. We need to look at both scale and structure, as well as both the present and the long term,” the ministry’s official release said.
The actual use of foreign direct investment (FDI) in the manufacturing sector rose by 6.8 per cent year on year from January to August, and that in hi-tech manufacturing increased by 19.7 per cent, which means the quality of investment has continued to improve, the official said.