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By Fukutaro Yamashita/Yomiuri Shimbun Correspondent
17:27 JST, February 16, 2025
BEIJING — China’s State Administration of Foreign Exchange has announced that the total net increase of foreign companies’ direct investments in the country in 2024 was about 90% lower than the previous year.
According to the state administration’s balance of international payments, the net increase in 2024 fell to $4.5 billion (about ¥680 billion). This was the lowest in the 33 years since 1991.
The data was calculated by subtracting the total funds withdrawn by companies due to discontinuing or downsizing businesses in China from new investments in plant construction and other projects.
This marks the third consecutive year of decline, with the net increase having fallen 99% from 2021, which was the peak year wherein investments reached $344 billion.
Foreign direct investments in China decreased compared to the previous quarter for the first time since the July-September quarter in 2023.
Outflow also exceeded inflow in the April-June quarter and the July-September quarter in 2024.
The reduced increase of foreign companies’ investments in China was partly affected by China’s economic slowdown, confrontations between China and the United States and companies’ concerns about China’s anti-espionage law.
As the administration of U.S. President Donald Trump is imposing high tariffs on countries including China, it is possible foreign direct investments in China will further decline, especially in the manufacturing sector.
