Reported 12 months ago
Recent reports have been circulating about a sudden halt in foreign investment in China. While some factors stem from specific financial transactions, the trend of foreign funds avoiding China as a substantial investment destination is indeed growing stronger amidst the backdrop of US-China rivalry. The so-called 'three giants of foreign-funded enterprises,' namely the automotive industry, semiconductors, and finance industry, have also experienced changes. Various reasons led to the 80% decrease in foreign investment in China, including a sluggish real estate market, uncertain economic prospects, concerns arising from US-China tensions, and the psychological impact of China's strengthened anti-spy law. However, the actual foreign investment utilization amount disclosed by the Chinese Ministry of Commerce for that year was 1.1339 trillion RMB, showing only an 8.0% decrease from the previous year. The sharp 80% decline in statistical data resulted from different statistical objects, such as financial transactions involved in the balance of payment statistics. Economic analysts have pointed out other factors contributing to this drastic decline, such as the accelerated repayment of foreign-currency-denominated loans by foreign-funded enterprises' local subsidiaries in China due to the depreciation of the RMB against the USD and reduced IPO activities of Chinese companies overseas. The changing structure of China's trade and industries, influenced by the US-China trade structure shift, is causing fluctuations in foreign investment in China and the overseas direct investment of Chinese enterprises in the mid to long term.
Source: YAHOO