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China’s FDI Trends 2024: Key Sources, Destinations, and Sectors
Encouragingly, the first nine months of 2024 have demonstrated signs of recovery, with China attracting RMB 640.6 billion (US$90.26 billion) in foreign investment. Notably, there has been an 11.4 percent increase in new foreign-invested enterprises (FIEs), with high-tech manufacturing, medical equipment, and professional technical services experiencing substantial growth in foreign capital.
[Source](https://www.china-briefing.com/news/chinas-fdi-trends-Based on the provided document,here’s a summary and analysis:
Summary:
- Wang He from Epoch Times discusses discrepancies in data regarding foreign investment in China.
- The Ministry of Commerce and the State Governance of Foreign Exchange (SAFE) provide conflicting figures.
– Ministry of Commerce: Foreign direct investment (FDI) growth rate in China for the first 11 months of 2024 was -27.9%, but there was still an inflow of 749.7 billion yuan.
- SAFE: Net inflow of FDI in China was -13 billion USD in the first three quarters of 2024, suggesting a negative net inflow for the whole year.
- Wang He cites a significant decrease in employment by foreign-funded enterprises in china, from 28.242 million in 2018 to 20.409 million in 2023, a 27.7% decrease.
- He doubts the official media’s claim that cross-border investment into China is becoming more service-oriented and light asset-oriented, citing the EU’s reduced investment.
- Wang He asserts that the CCP’s data is often fake or beautified and does not reflect the actual situation.
Analysis:
- Data Discrepancies: The conflicting data from different departments highlight potential issues with data accuracy,reliability,or manipulation.
- Decreasing Employment: The significant drop in employment by foreign-funded enterprises suggests a potential withdrawal of foreign capital and a negative impact on the local job market.
- Questioning Official Narrative: Wang He’s doubts about the official media’s narrative and his assertion that CCP data is often fake or beautified raise concerns about openness and the true state of foreign investment in China.
- General Trend: Despite the discrepancies, the overall trend suggested by both sets of data and wang He’s analysis is one of instability and decline in foreign investment in China.
the document presents a critical view of the state of foreign investment in China, highlighting data discrepancies, a potential withdrawal of foreign capital, and doubts about the accuracy of official data and narratives.The Standing Committee of the State Council of the Communist Party of China passed the “2025 Action plan for Stabilizing Foreign Investment” on Febuary 10. The meeting pointed out that foreign-invested enterprises play an vital role in absorbing employment and stabilizing exports, and should take more pragmatic and effective measures to “stabilize the stock of foreign-invested enterprises,” and “amplify the amount.”
Wang He said that the Sino-US trade war began in 2018, when the CCP proposed the “six stability” that included “stabilizing foreign investment and foreign trade.” Now changing the slogan to “stabilize the stock and expand the incremental volume,” which shows that the current loss of foreign capital is very serious, not only does there have no incremental volume, but also the stock is shaken. It now needs foreign capital to flow in to put out the fire.
wang He said that foreign capital did flow into China on a large scale in 2021, but shanghai will completely reverse once the city lockdown is locked down. Now that Trump has entered the White House again, a new Cold War between China and the United States might potentially be just around the corner. In this case, it is a delusion for the CCP to expand its incremental volume. The CCP is still treating Trump with toughness, which will only deteriorate the international surroundings, and foreign capital will be less likely to flow into China on a large scale, so its so-called stable …e been tightened,making the domestic economy full of uncertainty. He believes that with the increasing geopolitical pressure, the trend of de-Sinicization of industrial chains, and the rise of Southeast Asian manufacturing and markets, the CCP’s action plan to stabilize foreign investment will be tough to reverse the situation of foreign investment withdrawal.
, the official China Council for the Promotion of International Trade released the 2024 China Business Environment Report, saying that “the interviewed companies evaluated china’s business environment in 2024 with a score of 4.37 (out of 5 points),” and ”nearly 90% of the interviewed companies He evaluated China’s business environment as “very satisfied” or “relatively satisfied” and said that “more than 60% of the companies surveyed have good expectations for China’s prospects.”
But a recent survey by the American Chamber of Commerce in Shanghai showed that more than 50% of respondents were pessimistic about the prospects for business in China in the next five years. The EU Chamber of Commerce has also publicly criticized China’s business environment for becoming increasingly politicized. Enterprises have made thousands of suggestions, but basically no response has been received.
Editor-in-charge: Li Renhe
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