Charts of the Day: China’s FDI Growth Slowed but ‘Steady’ in 2022

Growth in foreign direct investment (FDI) into the Chinese mainland slid to 8% in 2022 from 20.2% in 2021, a pace the Ministry of Commerce described as “steady” despite the slowdown.

In U.S. dollar terms, investment was $189.1 billion, the commerce ministry announced on Wednesday.

In yuan terms, FDI into the mainland rose 6.3% to 1.2 trillion yuan. That was down from a 14.9% pace in 2021 which saw a record high inflow of foreign investment, previous statements by the ministry show.

A breakdown of monthly FDI data in dollar terms shows that year-on-year growth in investment inflows has gradually slowed over the year, dropping from a peak of 45.2% in the January-February period to 12.2% in the first eleven months, before ending at 8% for the whole year.

The 2022 growth in FDI was mainly driven by higher manufacturing investment, which jumped 46.1% to 323.7 billion yuan ($47.9 billion) and accounted for 26.3% of total FDI, the ministry said. Investment in high-tech industries increased by 28.3%, accounting for 36.1% of total FDI, with spending on electronic and communication equipment manufacturing surging 56.8%, the ministry said.

Despite the slowdown in overall FDI growth, investment from the European Union almost doubled, while that from countries involved in the Belt and Road Initiative grew 17.2%, according to the announcement. Investment from South Korea, Germany and the U.K. grew 64.2%, 52.9% and 40.7% respectively, the ministry said, without specifying any value.

Contact reporter Zhang Yukun (yukunzhang@caixin.com) and editor Nerys Avery (nerysavery@caixin.com)

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