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FDI or Foreign Direct Investment in China hit a 30-year low last year.
China’s direct investment liabilities in its balance of payments stood at $33 billion last year, according to data from the State Administration of Foreign Exchange released Sunday. That measure of new foreign investment into the country — which records monetary flows connected to foreign-owned entities in China — was 82% lower than the 2022 level and the lowest since 1993…
The government’s efforts to get overseas companies to return after Covid are falling short, and more will be needed if Beijing is to succeed in its aims. The continuing weakness highlights how foreign companies are pulling money out of the country due to geopolitical tensions and higher interest rates elsewhere.
It’s not just foreign companies investing less in Chinese markets. Individual Chinese investors are also pulling out after years of losses and sliding domestic stocks. Instead, some are now investing in funds that track foreign markets including the US. Even some «little pinks,» the pro-communist Chinese who frequently defend the Chinese government online, are having second thoughts now that their investments are losing money.
Leo, who was born in Beijing in the mid-1980s, said he had grown up as a nationalistic “little pink.” The first crack in his confidence, he said, was in 2021 when the government went after internet companies. The second crack appeared when the government abruptly ended its “zero-Covid” policy in December 2022 without preparing the population with effective vaccines or medications. Then in late July, the markets and the private sector failed to respond to government measures to stimulate the economy.
Leo’s change is remarkable. He said local Beijing residents like him and the people with whom he had gone to high school were among the stoutest supporters of the Communist Party’s rule because they benefited from the city’s expansion and the country’s growth…
He said that he wanted the government to loosen its grip on private enterprise and disband Communist Party branches that had proliferated inside companies, and that he wanted the private sector to start to invest again.
