According to data from greenfield investment monitor fDi Markets, China has witnessed a marked decrease in the number of FDI projects it has received from Europe. In the first quarter of 2012, China had 86 inward European investments, the lowest quarterly figure since the second quarter of 2003, which had 76. Between January 2003 and March 2012, China has been the second most popular destination market, after the US, for European FDI, accounting for just over 7% of all projects.
In the first quarter of 2012, China accounted for only 5.5% of all European FDI, falling into third position after the US and the UK. The country has also seen a large decrease in the amount of capital invested and in jobs created from European foreign direct investment.
This fall in inward FDI may be due to the fact that China’s two leading sectors between January 2003 and March 2012 – industrial machinery, equipment and tools, and chemicals – have had particularly bad starts to 2012. The textiles sector has also registered a marked decrease in FDI for Europe, having only one project for 2012 so far, contrasting against the 46 in total in 2011. Financial services, on the other hand, has already seen more projects in quarter one 2012 than the first and second quarters of 2011 combined, perhaps highlighting a shift in the type of FDI China is attracting from Europe.