Chinese FDI fell in early 2024 despite record highs

(MENAFN) Official data released by the Chinese Ministry of Commerce reveals that foreign direct investment (FDI) in actual use totaled 412.5 billion yuan, equivalent to approximately USD57.94 billion, during the first five months of 2024. This figure represents a 28.2 percent decrease compared to the same period last year. However, despite the decline in registered FDI, a notable increase in the establishment of new companies with foreign investments was observed, with 21,764 new enterprises established throughout China from January to May, marking a 17.4 percent increase from the previous year.

A ministry official quoted by the Chinese news agency Xinhua emphasized that despite the decline in registered FDI, the volume of FDI in actual use remains at a historically high level. The official attributed the decrease to the exceptionally high comparison base set in the previous year. Despite the overall decline, the manufacturing sector managed to attract 28.4 percent of total FDI inflows, amounting to 117.1 billion yuan. This represents a 2.8 percent increase over the corresponding period last year, indicating a continued improvement in the investment structure.

Moreover, there were notable increases in the flow of FDI into specific sectors, such as smart consumer equipment manufacturing and professional technical services. FDI into smart consumer equipment manufacturing surged by 332.9 percent, while FDI into professional technical services saw a significant increase of 103.1 percent on an annual basis. These trends suggest a shifting investment landscape, with a growing emphasis on sectors driving technological innovation and service-oriented industries. Despite the short-term fluctuations in FDI, the overall trend indicates a robust investment environment in China, characterized by ongoing diversification and strategic focus on key sectors. 



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