{"id":1450033,"date":"2024-01-11T03:40:00","date_gmt":"2024-01-11T08:40:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1450033"},"modified":"2024-01-11T03:40:00","modified_gmt":"2024-01-11T08:40:00","slug":"chinese-fdi-inflows-hit-multi-year-lows","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/chinese-fdi-inflows-hit-multi-year-lows\/1450033\/","title":{"rendered":"Chinese FDI Inflows Hit Multi-Year Lows"},"content":{"rendered":"

Chinese FDI Inflows Hit Multi-Year Lows<\/span><\/p>\n

\n

The\u00a0Chinese economy<\/a>\u00a0has thrown up several red flags in 2023 and now foreign investors are losing confidence in the world\u2019s second-largest economy.<\/p>\n

In the following graphic, Visual Capitalist’s Pallavi Rao<\/a> shows foreign direct investment (FDI) inflows have hit multi-year lows,<\/strong> using data accessed via the\u00a0Peterson Institute for International Economics<\/a>\u00a0and sourced from China\u2019s State Administration of Foreign Exchange (SAFE)<\/p>\n

<\/a><\/p>\n

\u2139\ufe0f\u00a0FDI<\/strong>\u00a0occurs when an investor in one country acquires significant and lasting financial interest in a foreign enterprise. This data includes the IPO value of Chinese companies in foreign markets.<\/p>\n

Foreign Investors Hit \u201cSell\u201d on China in 2023<\/h2>\n

Aside from a broadly slowing economy, the Peterson Institute\u2019s analysis highlights other key reasons why FDI inflows have scaled back so dramatically this year.<\/p>\n

Firstly,\u00a0geopolitical tensions<\/strong>\u00a0(in the form of an\u00a0escalating chip war<\/a>) between the U.S. and China are worrying foreign investors\u2014many of them American-headquartered companies with a presence in China, holding back on investments in local companies.<\/p>\n

Secondly, the closure of\u00a0due diligence firms<\/strong>\u00a0(which allow foreign investors to make informed decisions on Chinese companies) along with a new national security law aimed at restricting cross-border data flows have disincentivized foreign investors from betting big if they wanted to.<\/p>\n

<\/a><\/p>\n

Meanwhile, huge spikes in FDI inflows between 2018 and 2021 indicate the success of\u00a0Chinese companies listing<\/strong>\u00a0on American securities exchanges, which SAFE includes in its data. However, crackdowns from both Chinese and U.S. securities regulators in 2022 turned the tap off briefly. Despite the restrictions being since removed, new listings have not bounced back.<\/p>\n

Another Red Flag for the Chinese Economy<\/h2>\n

The Peterson Institute\u2019s comparison of gross and net FDI flows found a nearly $100 billion shortfall\u2014which means foreign firms are\u00a0selling<\/strong>\u00a0their Chinese investments, adding yet another red flag for the economy.<\/p>\n

This slowdown is now having a ripple effect across the region\u2014for Japan, South Korea, and Thailand\u2019s economies\u2014whose export sectors rely on substantial Chinese demand. Nations in\u00a0sub-saharan Africa<\/a>\u00a0will also feel the pinch as Chinese sovereign lending continues to fall, already past the lowest it\u2019s been in two decades.<\/p>\n

Meanwhile, on a broader scale, Chinese growth contributes to one-third of world economic growth, which means the global economy will miss growth projections made last year\u2014when economists had a more optimistic view of the world\u2019s second-largest economy.<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nWed, 01\/10\/2024 – 22:40<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/chinese-fdi-inflows-hit-multi-year-lows<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Chinese FDI Inflows Hit Multi-Year Lows The\u00a0Chinese economy\u00a0has thrown up several red flags in 2023 and now foreign investors are losing confidence in the world\u2019s…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1450033","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1450033","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1450033"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1450033\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1450033"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1450033"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1450033"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}