Foreign Direct Investment in China Drops 26% Year-on-Year to 57 Trillion Won in Q1

41.7% Increase Compared to Last Year's Q4
Growth in Manufacturing and High-Tech Manufacturing Sectors

The scale of foreign direct investment (FDI) into China in the first quarter of this year amounted to approximately KRW 57 trillion, showing a 26% decrease compared to a year ago.

According to the Chinese Ministry of Commerce on the 19th, the total FDI attracted by China from January to March this year was 301.67 billion yuan (about KRW 57.5 trillion), down 26.1% from January to March last year, when the country completed its COVID-19 lockdowns and began full-scale reopening.

Chinese Yuan [Image source=Yonhap News]

However, the Ministry of Commerce added that FDI in the first quarter of this year increased by 41.7% compared to the fourth quarter of last year.

Guo Tingting, Vice Minister of the Ministry of Commerce, said at a briefing that "FDI in the first quarter remains historically high."

By industry, FDI in accommodation and food services increased by 84.7% compared to the first quarter of last year, while construction (+17.5%), wholesale and retail (+2.2%), and finance (+1.4%) were also industries that saw FDI growth.

The Ministry of Commerce explained that FDI in manufacturing accounted for 26.9% of total FDI, up 2.3 percentage points from last year, and the share of high-tech manufacturing, which accounted for 12.5% of total FDI, also increased by 2.2 percentage points.

By investing country, the Ministry reported that investments from Germany and ASEAN (Association of Southeast Asian Nations) into China increased by 48% and 5.8%, respectively.

The number of newly established foreign-invested enterprises in China in the first quarter of this year was 12,086, up 20.7% from a year earlier.