China FDI Plunges to Record Low in 2024

Foreign direct investment (FDI) into China plunged by 27.1% in 2024, extending the 8% drop 2023, to record the sharpest decline in foreign direct investment on record with data going back since 2008.

The data reflected the decline in the country’s consumption growth, underscored by the accelerated drop in housing prices, risks of a deflationary spiral, and declining prices for financial assets in the absence of pledges of stimulus support from the government.

Additionally, growing defaults in major companies and opaque balance sheets for manufacturers across the supply chain triggered greater extents of unease for foreign investors.

Finally, the Chinese government’s increased control and regulation over output levels and capital requirements also discouraged investors.