China: Foreign direct investment slowed in 1H24 – UOB Group
Outflows of direct investment by foreign investors exceeded inflows in 2Q24 by a record USD 14.80 bn, the second time of such net outflows since data started in 1998, UOB Group economist Ho Woei Chen notes.
Net direct investment outflows in 2Q24
“China’s FDI inflows have weakened further in 2Q24. The net direct investment liabilities on the balance of payments (BOP) showed a record outflow. FDI reported by MOFCOM which only includes new FDI inflows also fell to its lowest since 3Q17.”
“China has remained the largest recipient of global FDI in 2023, after the US and ASEAN. The recent data from SAFE and MOFCOM suggests that China faces the prospects of a sharper slowdown in FDI inflows this year due to the ongoing trade tensions and its growth moderation.”
“The scaling down of FDI and the shift of some manufacturing operations overseas will inevitably weigh on the domestic job creation and growth prospects over the medium to long term. Thus, more efforts will be needed to promote private consumption as another growth driver.”
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