EXPERT COMMENT
Capital is leaving the country, but some net FDI outflows to other manufacturing destinations allow Chinese firms to avoid trade friction with the US.
On the face of it, China is facing something of a crisis when it comes to the flow of foreign direct investment (FDI).
For more than a year, the net flow of FDI into China has been increasingly negative. Data released last month by the State Administration of Foreign Exchange indicate that during the year to September 2023, a net outflow of more than $140 billion of long-term investment left China, or just under 1 per cent of China's GDP. A decade ago, by contrast, China was attracting net inflows of FDI to the tune of around 2 per cent of GDP.
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