During its trade war with the United States and Europe, China has seen both an increase in international funding at home and an increase in its own international funding this time.
China’s direct investment liabilities, an indicator of incoming foreign investment, fell by US$ 14.8 billion in the second quarter of this year, according to the latest data released by the State Administration of Foreign Exchange ( SAFE).  ,
The number was over US$ 4.5 billion for the first six weeks. According to Bloomberg, this would be China’s first quarterly net outflow of foreign investment since 1990, when equivalent data began, if the reduction continued in the second quarter of this year.  ,
In the second quarter of 2023, China’s director purchase responsibilities fell US$ 11.8 billion, the first drop in years. For the whole year of 2023, the number increased by US$ 33 billion. The gain, which was the lowest since 1993, was down by 82 % from the level in 2022.
In recent years, the US has encouraged its businesses to adopt a” China plus one” or “friend-shoring” method to expand their operations outside of China. Since last year, the European Union has started anti-subsidy investigations into Chinese-imported electric cars and renewable energy products.  ,
Some foreign companies made the decision to reduce their investments in China and leave the country as a result of these changes. In an effort to prevent possible taxes, some Chinese manufacturers began building companies in Europe.  ,
In the first half of this year, China’s foreign direct investment ( FDI) fell 29.1 % to 498.9 billion yuan ( US$ 69.5 billion ) from the same period of last year, the Ministry of Commerce said last month. The country’s overseas direct investment ( ODI) increased 16.6 % to US$ 72.62 billion.
In an article published on Monday, Mao Zhenhua, the co-founder and president of China Chengxin Credit Management Company and the co-director of Renmin University’s Economic Research Institute, writes that” some foreign owners have lately reduced their investments in China or even left the country because they were affected by the philosophy of de-globalization and the de-Sinicization strategy promoted by the United States.
He claims that China still needs to rely on the West to attract high tech because, despite the trend, foreign owners ‘ roles have remained constant.  ,  ,
He claims that some people in society believe that those who work for international companies or purchase foreign goods are not revolutionaries. There are also those who mistakenly believe that China’s imports benefit other nations, particularly the US.
He advises those who hold these views to make up their minds and comprehend that China’s trade with other nations is conducted in accordance with the mutual-benefit rule. He recommends that China should treat international firms with respect and be welcoming to people from all nations.  ,
Additionally, he claims, Chinese companies should n’t be accused of making foreign investments because many of them need to increase their overseas production capacity in order to lower their costs or avoid new tariffs that Western nations have arbitrarily imposed.  ,
He claims that Chinese companies ‘ international investments can promote long-term stability and stability of the country’s supply network.  ,
Foreign workers in anguish
The Ministry of Commerce’s unknown director stated on July 13 that it was only natural that FDI dropped in 2023 because it had increased every for ten years between 2013 and 2022.  ,
China may open up even further to attract more foreign buyers, according to the director.
In a remark published on July 18, Guan Tao, chief analyst at Bank of China International Holdings Co, writes that” some Western multimedia have hyped the idea of “external capital leaving China,” but their false reports ignored the fact that the composition of foreign investment in China is constantly being optimized.  ,  ,
Some Chinese skilled workers who lost their jobs were forced to work as meal deliverypeople because of this.
According to Guan, foreign funding in China’s high-tech manufacturing sector has increased significantly this year nevertheless.
He draws attention to the UN Trade and Development’s 2024 World Investment Report, noting that despite the absence of significant moves in funding flows, international FDI can be demonstrated to have decreased by more than 10 % in the previous year.
He claims that the effects of the new procedures, which China’s State Council announced in March and June, will be immediately apparent.  ,
In an article published on August 6 from Shaanxi-based journalist Mingcheng, a Shaanxi-based journalist claims that “over the past two years, many foreign companies have left China,” but authorities and officials have tended to state that the change has not had much of an impact on the economy. ” But in reality, the grass are finding it getting harder to make ends meet.”
He claims that after moving their high-tech groups from China to Vietnam and India or returning to their original nations, international tech giants remain the dominant players in the global marketplace.  ,
He claims that some Chinese skilled workers who lost their jobs were forced to work as meal deliverypeople because they were able to find suitable positions.  ,
He claims that some Taiwanese businesses will have more market share after foreigners leave, but that they will also be less motivated to improve their products or boost their profitability.  ,
Read: Beijing features self-reliance at Third Plenum
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