Foreign Direct Investment in China Continues to Fall

Foreign direct investment in China dropped in the first two months of the year, continuing a fall that started after economic growth plateaued amid a prolonged property downturn and weak domestic demand

China attracted 215.1 billion yuan ($29.88 billion) of foreign direct investment in the first two months of the year, down 19.9% from a year ago, the Ministry of Commerce said on Friday.

The ministry said the latest data was dwarfed by the record-high level a year earlier.

"Despite the decline this year, it is still at the third highest level in the past 10 years," the ministry said.

In 2023, foreign investment in the world's second largest economy dropped 8.0% from the previous year in yuan terms. It stopped releasing data in dollar terms last year.

The ministry tried to downplay the decline, saying "foreign investment is a market behavior and data fluctuations are normal and in line with market rules."

It also said China's advantages in attracting investment, including its large market, complete supply chain and infrastructure and abundant human resources, still outweighed unfavorable factors.

The number of newly established foreign-funded enterprises reached 7,160 in the first two months, up 34.9% on year and the highest level in the past five years, the ministry added.

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(END) Dow Jones Newswires

March 22, 2024 06:35 ET (10:35 GMT)

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