In the first quarter of 2023, China experienced a 26.1% decline in foreign investment, amounting to 301.7 billion yuan or 41.7 billion USD, according to data released by the Chinese Ministry of Commerce. This is the weakest first quarter since 2020. 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.
Despite this decline, China is making efforts to attract more investors. Premier Li Qiang pledged at the China Development Forum in Beijing in March to improve the business environment and implement reforms in key areas to create a “more open China” and collaborate with the world. Deputy director of China’s foreign exchange administration Xu Zhibin stated at the Boao Forum for Asia last month that China’s foreign direct investment developments were “basically in line with global trends.”
To promote foreign investment, China announced measures on April 19, including support for foreign organizations to issue bonds in yuan domestically and loosening restrictions on foreign strategic investments in Chinese listed companies. Additionally, 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. The country also plans to approve foreign investment in Chinese stocks and bonds efficiently.