New foreign investment into China slowed again last month, dealing a blow to policymakers’ efforts to attract more overseas capital to the world’s second-largest economy.
New actually utilized foreign investment into China was 102 billion yuan (US$14.1 billion) last month, according to calculations based on figures provided by the Chinese Ministry of Commerce yesterday. That was down 27 percent compared with the same month last year.
Efforts to convince overseas companies to return to China since the nation reopened after years of COVID-19 isolation are falling short. The continuing weakness highlights how foreign companies are putting less money into the nation due to geopolitical tensions and higher interest rates elsewhere.
Photo: AFP
The ministry in a statement accompanying the numbers said that fluctuations in investment data were normal, and the long-term outlook was strong with favorable conditions for investment.
Beijing’s efforts to woo back foreign capital has so far revolved around a series of action plans and warm language.
China in August last year announced a 24-point plan to address concerns, Chinese President Xi Jinping (習近平) promised “heart-warming” measures last year during a trip to the US, while this week the government unveiled another set of policies to further open up the Chinese market to foreign firms.
Officials on Wednesday said they had made progress on more than 60 percent of the 24-point plan at a news conference in Beijing, but foreign business groups have been more critical, saying they are still waiting to see how many of the pledges, which include better access to government contracts and relaxed regulations on transferring data overseas, are implemented.
There is also more incentive for multinationals to keep cash overseas, because advanced economies have been raising interest rates while Beijing has been cutting them to stimulate the economy.
New actually utilized foreign investment was 1.1 trillion yuan last year, 8 percent lower than the record in 2022.
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