Foreign investment outflow from China hits all-time high

China's foreign investment continues to decline, and China's attempts to "stabilize foreign investment" may not achieve the desired results.

According to Voice of America on February 20, China's foreign capital outflow has reached an all-time high, arousing the attention of the international community. Although China has implemented the "stabilization of foreign investment" plan to retain foreign investment, the possibility of such investment returning remains unclear due to the escalation of the US-China trade war, the deteriorating business environment, and the tightening of security checks in China.

According to data from the State Administration of Foreign Exchange, the deficit on the "capital and financial account" that records cross-border capital flows reached 180.7 billion US dollars in the fourth quarter of last year, with a total annual deficit of 441.6 billion US dollars, indicating an outflow of foreign capital from China.

According to Bloomberg, China's outward foreign capital flowed in 2024 to about $168 billion, the highest level since 1990. Chinese companies' overseas investment also reached $173 billion, indicating an acceleration in capital outflows. The analysis suggests that the wave of capital outflows may worsen after the resumption of the US-China trade war.

The Japanese Economic Journal pointed out that the Chinese economy has been declining rapidly due to slowing economic growth and repeated investigations on the pretext of "espionage activities," but the calculation method was not explained in detail in the report.

It was reported that the Chinese regime has put forward a "stabilization of foreign investment" plan to counter the decline in foreign investment. The Chinese regime held a standing meeting last week to review and approve the "Action Plan for Stabilizing Foreign Investment by 2025." However, China's attempts to stabilize foreign investment may not achieve the desired results.