China’s foreign investment in the first quarter of 2023 fell by 26.1%, amounting to 301.7 billion yuan or 41.7 billion USD, making it the weakest first quarter since 2020, according to data released by the Chinese Ministry of Commerce. The decline in foreign investment capital has been gradual over the past three months, decreasing from 113 billion yuan in January to 102 billion yuan in February and 90 billion yuan in March. However, despite this decline, foreign investment capital in China increased by 41% and the investment structure improved compared to the fourth quarter of 2023, according to Ji Xiaofeng, an official at the Ministry of Commerce.
In recent years, China has been making efforts to attract more investors. As seen at the Boao Forum for Asia last month, deputy director of China’s foreign exchange administration Xu Zhibin stated that China’s foreign direct investment developments were “basically in line with global trends.” Beijing is encouraging foreign technology companies to raise funds through bond issuance and creating favorable conditions for foreign investors to participate in Chinese technology companies. Additionally, measures were announced on April 19 to promote foreign investment, including support for foreign organizations to issue bonds in yuan domestically and loosening restrictions on foreign strategic investments in Chinese listed companies.
China is also planning to approve foreign investment in Chinese stocks and bonds efficiently as part of its efforts to attract more investors. Despite this decline in capital inflows during the first quarter, Premier Li Qiang pledged at the China Development Forum in Beijing earlier this year to improve the business environment and implement reforms in key areas to create a “more open China” and collaborate with the world.
