Finance

Foreign direct investment in China decreased by 5.6 percent in the first 5 months

As a new sign of the economic slowdown in China, it is observed that foreign direct investment (FDI) has decreased.

Foreign direct investments to China entered a downward trend in April and May, after increasing 0.5 percent annually in dollar terms in the first quarter of 2023 compared to the same period of the previous year.

According to the statement made by the Ministry of Commerce of China, foreign direct investments in the country decreased by 5.6 percent annually to 84.35 billion dollars in the January-May period.

Foreign direct investments increased by 0.5 percent annually in the first quarter of 2023 compared to the same period of the previous year, and decreased by 3.3 percent in the first four months.

In the same period, China’s direct investments abroad (ODI) increased by 16.1 percent year on year, reaching 51.78 billion dollars.

Signs of a slowdown in the economy

It is observed that the downward trend in foreign direct investments continued in the second quarter, as well as external conditions, as well as the slowdown in the Chinese economy.

The data for May reveal that the economy had difficulty in sustaining the growth momentum it caught in the first quarter of this year, after the recession in the last quarter of last year.

According to the data of China’s National Bureau of Statistics (UIB), industrial production increased by 3.5 percent year-on-year in May, exceeding the 5.6 percent increase in April. under Retail sales, which are accepted as the measure of consumption, increased by 12.7 percent, falling behind the 18.4 percent increase in April.

Despite the low base caused by the closure and quarantine measures implemented due to the Kovid-19 outbreak in the spring of last year, it is seen that the acceleration in production and consumption is weak.

On the other hand, leading economic activity data announced by UİB pointed to a decline in both the manufacturing industry and non-manufacturing sectors in May. Manufacturing industry purchasing managers’ index (PMI) decreased by 0.4 points to 48.8, while non-manufacturing PMI decreased by 1.9 points to 54.5.

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