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China's economy at risk as foreign investment reaches unprecedented lows

China's economy at risk as foreign investment reaches unprecedented lows

Posted on August 18, 2023   |  

Foreign investment in China experienced an unprecedented decline during Q2, attributed to U.S.-China technology tensions and doubts about China's commitment to openness.

Q2 witnessed an 87% drop in foreign companies' direct investment in China compared to 2022, marking the most substantial decline since 1998.

Over the past year, foreign investment has plummeted by over 50% for the same quarter, influenced by stringent COVID policies and escalating U.S.-China tensions.

A survey conducted by the American Chamber of Commerce in China highlights U.S.-China tensions as a significant business risk, with 66% of respondents expressing concerns.

The U.S. administration advocated for "friend-shoring," emphasizing supply chain partnerships with amicable nations.

Heightened regulations on investments, including sectors like semiconductors and artificial intelligence, may further discourage potential investors, raising questions about China's future trade and investment openness.

 



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