Economists Explain Why Foreign Investment in China’s Manufacturing Hasn’t Returned to Pre-Pandemic Levels

Foreign investment in China’s manufacturing sector failed to return to pre-pandemic levels last year, possibly due to the impact of Beijing’s “zero-Covid” policy and the Sino-U.S. tariff war, economists told Caixin.

Realized foreign direct investment (FDI) in manufacturing fell 4.6% in 2021 from 2019, Minister of Commerce Wang Wentao said at a press conference early this month. Manufacturing FDI accounted for 19.4% of China’s total inward FDI last year, he said, down from 20.8% in 2020 and 25% in 2019.