Foreign companies pulled more money from China last quarter, a sign that some investors are still pessimistic even as Beijing rolls out stimulus measures aimed at stabilizing growth.
China’s direct investment liabilities in its balance of payments dropped US$8.1 billion in the third quarter, data released by the Chinese State Administration of Foreign Exchange showed on Friday. The gauge, which measures foreign direct investment (FDI) in China, was down almost US$13 billion for the first nine months of the year.
Foreign investment into China has slumped in the past three years after hitting a record in 2021, a casualty of geopolitical tensions, pessimism about the world’s second-largest economy and stronger competition from Chinese domestic firms in industries such as cars. Should the decline continue for the rest of the year, it would be the first annual net outflow in FDI since at least 1990, when comparable data begins.
Photo: Reuters
Companies that have pulled back some China operations this year include automakers Nissan Motor Co and Volkswagen AG, along with others such as Konica Minolta Inc.
Nippon Steel Corp in July said it was exiting a joint venture in China, while International Business Machines Corp said it is shutting down a hardware research team in the country, a decision affecting about 1,000 employees.
The prospect of an expanded trade war and deteriorating relations with Beijing during US president-elect Donald Trump’s second term might further weigh on investment.
“Geopolitical tension” is the topmost concern for members of the American Chamber of Commerce in Shanghai, group chair Allan Gabor said.
“It makes it difficult to plan big investments, but on the contrary, we see a lot of members making small and medium-sized investments,” Gabor said in an interview with Bloomberg TV last week during the China International Import Expo. “It’s a much more surgical investment environment.”
Still, government efforts in late September to stimulate the economy have already benefited one group of foreign investors, with the value of stocks held by foreigners jumping more than 26 percent from August,
China’s central bank data showed. The Chinese benchmark stock index gained almost 21 percent in September after the start of a coordinated stimulus effort, although it has since given up some of those gains.
By contrast, outbound investment from China has been rising sharply. In the third quarter, Chinese firms increased their overseas assets by about US$34 billion, Chinese State Administration of Foreign Exchange data showed.
Outflows so far this year reached US$143 billion, the third-highest total on record for the period. That is likely to continue and expand as more countries put tariffs on Chinese exports.
EUROPEAN TARGETS: The planned Munich center would support TSMC’s European customers to design high-performance, energy-efficient chips, an executive said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday said that it plans to launch a new research-and-development (R&D) center in Munich, Germany, next quarter to assist customers with chip design. TSMC Europe president Paul de Bot made the announcement during a technology symposium in Amsterdam on Tuesday, the chipmaker said. The new Munich center would be the firm’s first chip designing center in Europe, it said. The chipmaker has set up a major R&D center at its base of operations in Hsinchu and plans to create a new one in the US to provide services for major US customers,
The Ministry of Transportation and Communications yesterday said that it would redesign the written portion of the driver’s license exam to make it more rigorous. “We hope that the exam can assess drivers’ understanding of traffic rules, particularly those who take the driver’s license test for the first time. In the past, drivers only needed to cram a book of test questions to pass the written exam,” Minister of Transportation and Communications Chen Shih-kai (陳世凱) told a news conference at the Taoyuan Motor Vehicle Office. “In the future, they would not be able to pass the test unless they study traffic regulations
GAINING STEAM: The scheme initially failed to gather much attention, with only 188 cards issued in its first year, but gained popularity amid the COVID-19 pandemic Applications for the Employment Gold Card have increased in the past few years, with the card having been issued to a total of 13,191 people from 101 countries since its introduction in 2018, the National Development Council (NDC) said yesterday. Those who have received the card have included celebrities, such as former NBA star Dwight Howard and Australian-South Korean cheerleader Dahye Lee, the NDC said. The four-in-one Employment Gold Card combines a work permit, resident visa, Alien Resident Certificate (ARC) and re-entry permit. It was first introduced in February 2018 through the Act Governing Recruitment and Employment of Foreign Professionals (外國專業人才延攬及雇用法),
‘A SURVIVAL QUESTION’: US officials have been urging the opposition KMT and TPP not to block defense spending, especially the special defense budget, an official said The US plans to ramp up weapons sales to Taiwan to a level exceeding US President Donald Trump’s first term as part of an effort to deter China as it intensifies military pressure on the nation, two US officials said on condition of anonymity. If US arms sales do accelerate, it could ease worries about the extent of Trump’s commitment to Taiwan. It would also add new friction to the tense US-China relationship. The officials said they expect US approvals for weapons sales to Taiwan over the next four years to surpass those in Trump’s first term, with one of them saying
RSS