1st Feb. 2023: FDI in 2022, increasing consumption, economic activity in January, IMF’s forcasts

This episode covers data on foreign direct investment in China in 2022, the State Council’s emphasis on expanding consumption in 2023, China’s manufacturing and services activity in January, and the International Monetary Fund’s global economic growth forecasts. On the Chamber side, the Business Confidence Survey 2023 opened on 30th January for members to give their input on China’s business sentiment.

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Read more:

China 2022 FDI (in Chinese):


State Council exclusive meeting:


IMF global economic growth projections:


Official manufacturing and non-manufacturing PMI for January (in Chinese):


Business Confidence Survey 2023:



RUI: Hello and welcome to China Shortcuts,

MARIANN: the European Chamber’s weekly catchup about the Chinese business landscape.


RUI: In 2022, the flow of foreign direct investment into China slowed significantly compared to the previous year, as COVID flare-ups and subsequent control measures continued to hamper business activity throughout the year.

MARIANN: Data released by the Chinese Ministry of Commerce on the 18th January showed that FDI increased 6.3 per cent year-on-year in yuan-denominated terms. While this indicated an overall slowdown in foreign capital inflows, certain areas, such as manufacturing and high-tech industries still saw rapid growth in actual use of FDI in 2022. The Ministry also stated that capital inflows from the EU have increased by more than 90 per cent compared to 2021. This is significant, as the 2021 data still showed a 10.4 per cent drop in FDI from the EU. However, since no breakdown was provided about EU investments into China, it is difficult to assess what last year’s increase means in absolute terms.


RUI: China will rely on the recovery of consumption as the main economic driving force, as it is moving towards an economic rebound in 2023.

MARIANN: At an exclusive meeting of the State Council held on 28th January, Premier Li Keqiang stressed the need to deliver on policies aimed at increasing consumption. The Premier called for restoring the structural role of consumption in the economy, saying that the greatest potential of the Chinese economy lies in consumption by 1.4 billion people. The same goal was echoed by many of China’s regional governments as well, when in recent weeks they announced their policy targets for the year ahead. The State Council also emphasised the need for active efforts to attract foreign investment, and the implementation of further measures to facilitate cross-border travel.


RUI: After months of continuous decline, China’s manufacturing and services activity returned to a growth trajectory in January, as the country started reopening to the world.

MARIANN: According to data released by the National Bureau of Statistics on the 31st of January, the official purchasing managers’ index or PMI showed that manufacturing activity rebounded in January, albeit the pace of growth was mild. New orders showed a stronger recovery than production, as the Chinese New Year holiday bolstered demand, while factories experienced staff shortages due to COVID-infections and workers returning home for the holiday. The recovery in activity differed according to company size: while large companies’ performance did grow, the factory activity of small and medium-sized enterprises still fell short of the 50-point benchmark that separates decline from growth. Business sentiment, however, improved significantly, with manufacturing companies showing increased optimism about their growth prospects for the year ahead. The service industry also showed a rebound in activity in January, ending a six-month long downward trend. Demand notably expanded, with the business activity indices of industries heavily affected by the pandemic, such as retail, accommodation and catering showing rapid improvement in the first month of 2023.


RUI: On the 30th of January, the International Monetary Fund released its updated global economic growth forecasts, projecting that China’s sudden re-opening will pave the way for a rapid rebound in activity.

MARIANN: The IMF has revised its 2023 growth forecast for China from the 4.2 per cent calculated in October to 5.2 per cent. On a global scale, the international organisation expects to see weak growth compared to historical records, citing the fight against inflation and the war in Ukraine as the major factors weighing on activity. While the IMF’s outlook on China’s economic performance indicates more optimism due to the country’s re-opening, it warns that China’s recovery could stall amid greater-than-expected economic disruptions from current or future waves of COVID-19 infections or a sharper-than-expected slowdown in the property sector.


RUI: The European Chamber’s annual survey of European companies’ sentiment about operating in the Chinese market kicked off on the 30th of January. The Business Confidence Survey’s 20th edition is the Chamber’s first following the easing of China’s stringent pandemic control measures.

MARIANN: Along with the Position Paper, the Business Confidence Survey forms the backbone of the Chamber’s advocacy efforts. It provides a comprehensive analysis of China’s business environment, outlining both the hurdles that European companies face in the Chinese market, as well as the improvements in operating conditions they have observed. The results of the survey will be published in June, and will be presented to Chinese and European stakeholders, media and other organisations. 

RUI: If you are our member, don’t miss this valuable opportunity to shape the Chamber’s messaging for the coming year.  We are reaching out to all our member companies through their registered primary contact, who are sent a link and a unique access code to the survey. All information received from members is anonymised and will remain strictly confidential. You’ll find a link in the show notes with more details on how you can participate. Don’t hesitate to contact us if you have any questions.

MARIANN: Thanks for listening. Tune in again in next week.

RUI: In the meantime, find useful links in the episode notes.

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