FDI in China Turns Negative For First Time in 25 Years

According to data published in China's balance of international payments (BOP), quarterly foreign direct investment (FDI) inflows to China amounted to approximately $-11.8 billion in the third quarter of 2023. This is the first time that inward FDI flows have fallen to negative figures since the data was first published back in 1998. This decline suggests that foreign investors are pulling out money at a faster rate from the country than they are investing there.

Multiple businesses are taking money and operations out of China, the latest of which, Bloomberg reports, is Vanguard, one of the world's largest asset management firms.

Reasons cited for the downturn include geopolitical tensions, such as fraying relations with the United States, as well as the country’s low interest rates, and wariness from investors as the country faces a continued economic slowdown.