While global foreign direct investment (FDI) has been on a downward trend in recent years, China stands out as an exception, with foreign investment expanding to foster new quality productive forces.
According to the World Investment Report 2024 published by the United Nations Conference on Trade and Development, global foreign direct investment in 2023 amounted to $1.3 trillion, marking a year-on-year decrease of 2 percent. This downturn is primarily influenced by two major factors.
Firstly, global economic growth has been consistently slow. The Global Economic Prospects report released by the World Bank on June 11 highlighted that global economic growth is expected to stabilize at 2.6 percent, significantly lower than the average 3.1 percent observed in the decade preceding the COVID-19 pandemic. This sluggish growth has made transnational companies more cautious about investing abroad.
Secondly, the intensification of international geopolitical tensions has introduced more obstacles to cross-border investments. Developed countries have increasingly adopted deglobalization policies, tightening regulations on foreign investments and boosting subsidies for domestic companies. These measures have undermined market rules and the international economic and trade order, destabilizing global industrial and supply chains. As a result, normal economic and trade exchanges, including international trade and foreign investment, have become increasingly challenging.
Amidst these global challenges, China has managed to attract and expand foreign investment by creating a favorable environment for investors. By focusing on innovation, sustainable development, and enhancing the quality of its productive forces, China continues to position itself as a key player in the global economic landscape. This strategic approach not only offsets the global decline in FDI but also contributes to the advancement of high-quality industries and technologies within the country.
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Foreign investment expands in China for new quality productive forces
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