China registers the lowest level of foreign investment in two decades

China registers the lowest level of foreign investment in two decades

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Foreign direct investment in China (FDI) is at a minimum. Specifically, last year it sank to its lowest level in 23 years, according to data provided by Xi Jinping’s government.

Specifically, the Asian giant stopped receiving 42.7 billion dollars less (about 40 billion euros), that is, less than a quarter of what they registered at the end of the fiscal year 2022. The latest result was revised upward from the preliminary figure of $33 billion released by the State Administration of Foreign Exchange last month.

A different indicator from the overseas investment publications carried out by the Ministry of Commerce shows that the total FDI used in China, that is, China’s financial and capital accounts that reflect the monetary flow in and out of the mainland linked to foreign entities, fell 8% to 1.1 trillion yuan in 2023that is, about 156,000 million dollars.

According to SAFE data, investment in securities by foreign entities on the continent amounted to a net inflow of $14.1 billion last year, reversing a net outflow of $109 billion in 2022. This can mainly be attributed to a recovery in foreign investment in Chinese bonds, which recorded a net inflow of $6.6 billion last year, reversing a net outflow of $147.4 billion the previous year.

The annual meeting of the Chinese People’s Congress (NPC) and the Chinese People’s Consultative Conference (CPPCC), known as the two sessions, made at the beginning of the month March concluded with a report presented by Chinese Prime Minister Li Qiang to party members in which he proposed reducing the blacklist of foreign investments, especially in the manufacturing sector, and facilitating market access in telecommunications. medical assistance and other services. Which represents an “impressive” opening, according to a Caixin editorial.

But in August they began to tackle the problem of foreign disinvestment with the famous 24 point guidelinewhich promised that foreign companies would have the same government support as native Chinese companies.

The thing is that the Chinese economy is trying to recover from the harsh restrictions of the pandemic. Long-term concerns about China’s growth prospects and a deteriorating business environment fueled by rising geopolitical tensions, particularly with the United States, have also affected foreign investment in the country.

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