In the first quarter of 2023, China’s foreign investment decreased by 26.1%, amounting to 301.7 billion yuan or 41.7 billion USD, marking the weakest first quarter since 2020, according to data from 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, China has made efforts to improve its business environment and attract more investors.
In a speech 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.” This suggests that despite the decline in foreign investment capital in the first quarter, China is still making efforts to attract more investors and remain competitive on a global scale.
To promote foreign investment, China announced measures on April 19th, including support for foreign organizations to issue bonds in yuan domestically and loosening restrictions on foreign strategic investments in Chinese listed companies. Beijing is also encouraging foreign technology companies to raise funds through bond issuance and creating favorable conditions for foreign investors to participate in Chinese technology companies. Additionally, the country plans to approve foreign investment in Chinese stocks and bonds efficiently.
Despite the decline in foreign investment capital in the first quarter of 2023, these measures indicate that China is committed to improving its business environment and attracting more investors. With Premier Li Qiang’s pledge at the China Development Forum in Beijing to implement reforms and create a “more open China,” it appears that this trend will continue into the future.