China reassures assembled multinationals such as Tesla, HSBC as FDI and stocks dip
- Meeting held to assuage major players as downward trends continue in key metrics
- Foreign investment beginning to move elsewhere, with Southeast Asia an increasingly attractive alternative
In the aftermath of a massive sell-off in the A-share market and a spike in investor worries, China’s central bank brought in foreign banks and multinational firms for a meeting in which it pledged to “optimise” its policy support.
Companies invited to attend the Monday gathering included JPMorgan, HSBC, Deutsche Bank, Tesla and Schneider, all of which have a large presence in China.
Echoing these priorities, People’s Bank of China governor Pan Gongsheng emphasised the need for a “market-oriented” and “law-based” environment in which businesses can thrive.
But even with these changes, investment continues to move away from China due to concerns over national security regulation, decoupling risks between the US and China, and flagging growth momentum weighed down by distress in the property market.
Foreign direct investment in China fell by 5.1 per cent, year on year, for the January-August period, to 847.2 billion yuan (US$116 billion), the Ministry of Commerce said on Friday. In the first seven months of 2023, US dollar-denominated foreign investment dropped by 9.8 per cent from a year earlier, to US$111.8 billion.