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The end of Foreign Direct Investment in China

 In 2019, FDI in China totalled nearly 350 billion dollars.   In 2024, according to the Chinese government, it totalled 3.4 billion, a 99% collapse.   

There are several reasons for the collapse, the most important is the increase in security and making almost any data state secret, it became impossible for companies to have a good sense of what was happening in China.   The second reason is COVID-19, the corporate link between foreign companies and their Chinese subsidiaries were broken during the almost two-year-long shutdown.   Third, for the past 8 years the trend toward foreign trade has been negative, first Trump imposed tariffs on Chinese goods, but then Biden left them in place, and A bit later the Europeans did the same thing, the truth was that the trade imbalance between Europe and China and between the US and China has grown at double-digit speed.    

My personal experience is inexistent, but if you cannot have a management consultant tell you the "lay of the land" as a manager you have to avoid that market.   However, more important China is no longer and has not been for years the low-cost, high-proficiency market that it was a decade ago.     There is no real economic incentive to produce in China the numbers don't add up, and those who remain do so because of inertia and sunk costs.

The most amazing thing was that China took the news in stride.  Fascinating!

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