Chart of the Day: Foreign Investment Into China Grew 25.6% in First Quarter

China’s foreign direct investment (FDI) inflow increased 25.6% year-on-year in the first quarter, in what the Ministry of Commerce described as a “stable beginning” for the year.

The Chinese mainland attracted 380 billion yuan ($60 billion) in FDI in the period, Shu Jueting, a commerce ministry spokesperson, said at a Thursday press conference. The indicator excludes foreign investment in banking, insurance and securities.

Measured in U.S. dollars, FDI grew 31.7% year-on-year to $59.09 billion, Shu said.

Shu highlighted that FDI in high-tech industries in the first quarter grew 52.9% year-on-year to 133 billion yuan, which accounted for over a third of the total FDI.

Whether high growth can continue into the second quarter remains a question, given that Beijing’s “zero-Covid” strategy has led to lockdowns in major cities including Shanghai, severely disrupting foreign companies’ operations and pushing up their costs.

Responding to a query about the commerce ministry’s efforts to cushion the impact of Covid-19 outbreaks on foreign companies in China, Shu said the Chinese government had set up a task force for important foreign investment projects. She added that the commerce ministry, together with relevant state departments and local governments, had taken steps to help foreign companies — especially those in major Covid-stricken areas — with resuming production, logistics and getting personnel into China.

Last year, despite the continued impact of Covid-19 on global economic activity, the Chinese mainland’s FDI rose 14.9% to 1.15 trillion yuan, topping 1 trillion yuan for the first time, according to data from the commerce ministry.

The Chinese mainland was the world’s second-biggest recipient of FDI in 2019 and 2020 measured in U.S. dollars, according to data compiled by the United Nations Conference on Trade and Development.

Contact reporter Zhang Yukun (yukunzhang@caixin.com) and editor Bertrand Teo (bertrandteo@caixin.com)

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