Foreign direct investment in China has plunged by double-digit amounts in every month since May and fell by 34% in September, according to a report by the Financial Times, which said that calculations based on Commerce Ministry data compiled by Wind showed FDI fell by over a third to 72.8 billion yuan ($10 billion) in September, which was the “biggest decline since monthly figures became available in 2014.”
The country saw a record $189 billion in FDI in 2022, but geopolitical tensions and western calls to “de-risk” supply chains had driven a decline in foreign investment that was at a two-decade low, the report said, noting that higher interest rates in the US created an incentive for US companies to “re-shore” working capital from China. Data from Prequin also showed that venture funds and private equity groups investing in China had only raised $5.7bn this year, which was only a quarter of last year and a fraction of the figure raised in 2021.
Read the full report: The FT.
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