According to the State Administration of Foreign Exchange of the People’s Republic of China, foreign direct investment in China turned negative in July–September for the first time in four quarters. New investment fell below capital recovered through withdrawals and business scale-backs, while economic uncertainty has dampened investment appetite.
According to the State Administration of Foreign Exchange of the People’s Republic of China, which released China’s balance of payments data for July–September, direct investment by foreign companies fell for the first time in four quarters. The decline was attributed to capital recovered from funds allocated to new investment falling below the amount of new investment. As a result, foreign direct investment in China is reported to have fallen below its previous level.
There is a view that foreign companies’ investment appetite is declining as the economic outlook remains uncertain and expectations for economic growth fade. Weak consumption resulting from sluggish domestic demand and intensifying price competition are also cited as factors affecting foreign companies’ business expansion.
Direct investment by foreign companies in July–September was reportedly $900 million, possibly down from the previous quarter. This shift in sentiment toward foreign investment in China is seen as potentially accelerating the trend of companies withdrawing from the Chinese market.