Explainer | How much is China’s foreign direct investment and is it still a good destination for overseas investors?
- Foreign direct investment (FDI) into China increased by 26.1 per cent in US dollar terms in the first four months of 2022 compared to a year earlier
- But questions have been raised over whether China’s will remain a preferred destination for foreign investment due to its zero-Covid policy
Amid China’s draconian zero-Covid policy, an increasing number of foreign companies have, or plan to, delay or cut any new investment in the country.
This source of funding, referred to as foreign direct investment (FDI), offers a barometer to gauge the long-term interest of foreign business community in China.
Official FDI figures showed an increase of 26.1 per cent in US dollar terms in the first four months of 2022 compared to a year earlier, but there are suggestions some are looking to move their operations out of the country.
This has added to the debate of an exodus from China that has been unfolding for years amid rising labour costs and geopolitical tensions.
What is foreign direct investment (FDI)?
FDI includes actions of an individual foreign investor or a group of foreign investors that set up an entity or invest in a new project in China.
Examples include NBCUniversal setting up a subsidiary and a joint venture to establish the Universal Beijing Resort.