Foreign investment in China declined by 26.1% in the first quarter, reaching 301.7 billion yuan, equivalent to 41.7 billion USD, according to recent data from the Chinese Ministry of Commerce. This marks the weakest annual first quarter since 2020. The scale of foreign investment capital in the country has gradually decreased over the past three months, from 113 billion yuan in January, to 102 billion yuan in February, and 90 billion yuan last month.
Ji Xiaofeng, an official at the Ministry of Commerce, attributed the decline partly to a high base in the same period last year. Compared to the fourth quarter of 2023, foreign investment capital in China in the first quarter increased by 41% and the investment structure improved. Speaking at the Boao Forum for Asia last month, deputy director of China’s foreign exchange administration Xu Zhibin stated that China’s foreign direct investment developments were “basically in line with global trends.”
In response to this decline, Premier Li Qiang pledged to improve the business environment and step up reforms in key areas to create a “more open China” and cooperate with the world. In an effort to attract more investors, Beijing announced measures to promote foreign investment, including supporting foreign organizations to issue bonds in yuan domestically and loosening restrictions on foreign strategic investments in Chinese listed companies. Additionally, Beijing encourages foreign technology companies to raise money through bond issuance and creates favorable conditions for foreign investors to participate in Chinese technology companies.
