Is the decline in FDI flows into China a cause for concern?
AMRO’s research finds the decline in FDI does not indicate a mass exodus of foreign firms from China. Instead, cyclical factors such as tighter global financial conditions and higher borrowing costs have contributed to the slowdown in foreign capital inflows. Notably, utilized FDI, reported by the Chinese Ministry of Commerce, was significantly higher than the the balance of payments-based figures in 2023-2024, pointing to a more nuanced picture.
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