China’s FDI plummets by 30.4% in first 9 months of 2024

In 2024, China’s foreign direct investment (FDI) saw a significant decline of 30.4%, amounting to 640.6 billion yuan ($89.9 billion) in the first nine months. Despite this overall decrease, high-tech manufacturing emerged as a bright spot, with a 12% share of total FDI inflows.

Sectors like medical equipment, computer, and office equipment manufacturing experienced notable increases in FDI. Interestingly, Germany and Singapore defied the trend by increasing their FDI into China.

The Chinese government has introduced new measures to attract and retain foreign investment, such as policy reforms, expanding sectors open to foreign investment, and offering tax incentives. Additionally, tax benefits have been extended until 2027 to encourage investment in research and development centers. However, the effectiveness of these measures remains uncertain.

As China navigates global economic uncertainty and geopolitical tensions, its ability to address investor concerns and adapt to the changing global economy will determine its future as a top destination for FDI. The coming years will be crucial in shaping China’s FDI landscape.