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China has been experiencing an alarming drop in FDI since 2013. Katie Morrison reports.

Greenfield investment monitor fDi Markets has recorded a year-on-year downward trend in FDI in China between January 2013 and December 2016.

During 2013, a total of 1060 projects were recorded, excluding retail projects. This number decreased in 2014 by 8.11% to 974 projects. A sharp decline of 18.89% was recorded in 2015 with 790 projects, while 2016 hit an all-time low of 710 projects – a 10.12% difference on the previous year. The overall decrease in FDI between 2013 and 2016 was a staggering 33.01%.

Data shows that job creation in China plummeted 35.11% between 2013 and 2016. Capital investment into the country also decreased between 2013 to 2015, though it recovered slightly in 2016.

The top investors between 2013 and 2016 were the US, Germany and Japan. The top destination cities for investment were Shanghai, which received 862 investment projects; Beijing, which saw 373 projects; and Suzhou, Tianjin and Shenzhen, with 125, 122 and 121, respectively.

Historically, looking at investment into China since 2003 when fDi Markets’ records began, 2016 marked an all-time low for the country for both projects and job creation. The worst performing year on record for capital investment was 2015, when the country received only $57.58bn.

China has slowly but surely been slipping down the global investment rankings year by year. In 2013 it ranked second globally for FDI projects but dropped to third place in 2014 and down to fourth during both 2015 and 2016.

During 2017, China’s government announced plans to cut restrictions on foreign companies operating in the country, in an effort to curb both falling FDI and to increase flow of outward investment. The benefit of such efforts is yet to be seen, however, with FDI during the first two quarters of 2017 at a record low. 

This article is sourced from fDi Magazine
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