China’s foreign direct investment plunges 28 percent to $57.94 billion in 5-month period

Foreign direct investment (FDI) in China declined by 28.2 percent to reach 412.5 billion yuan ($57.94 billion) during the first five months of 2024 compared to the same period last year. 

Despite the drop in FDI, the Chinese Ministry of Commerce reported that 21,764 new foreign-invested firms were established across China in the reporting period, representing a 17.4 percent increase.

Manufacturing sector attracts larger share of FDI

A ministry official attributed the decline in FDI to a high comparison base from the previous year, stating that “the scale of foreign investment in actual use is still at a historically high level.”

The manufacturing sector attracted 28.4 percent, or 117.1 billion yuan, of the total FDI inflow, up 2.8 percentage points from the same period last year, indicating continued improvement in investment structure. FDI inflows into smart consumer equipment manufacturing and professional technical services increased by 332.9 percent and 103.1 percent year-on-year, respectively.

China climbs in global competitiveness ranking

Regarding China’s global competitiveness, the country saw a significant improvement in the World Competitiveness Ranking 2024, climbing seven positions to 14th place. Arturo Bris, director of the International Institute for Management Development (IMD) World Competitiveness Center, cited China’s strong economic recovery post-pandemic, improvements in corporate governance practices, and better access to talent and financing of technologies as factors contributing to the country’s increased competitiveness.

Read more: Chinese financial sector sees 8.5 percent increase in total assets, reaching $66.93 trillion

Asia leads in competitiveness gains

Bris also noted that Asia, including countries like China, Singapore, Thailand, and Indonesia, were the big winners in the latest competitiveness ranking. He predicted that in the coming years, the global economy will experience more fragmentation and protectionism, and China, with its better domestic market and access to commodities and natural resources, is expected to perform well in this environment.

The World Competitiveness Ranking 2024 also showed that emerging markets are catching up with more advanced economies, especially in the areas of innovation, digitalization, and diversification.

For more economy news, click here.