23rd August 2023: China’s declining FDI

This episode contains segments on China’s FDI that dropped at the fastest rate recorded in over three years during the first seven months of 2023; on Chinese Premier Li Qiang’s emphasis on advancing the country’s digital economy as a means to support its economic recovery and high-quality development; on China’s central bank hinting at possible monetary easing as monthly loans hit a 14-year low and on China’s new guidelines on recycling equipment for wind and solar energy production. From the Chamber’s side: join the European Chamber’s event on 30th August to learn more about the EU’s recently unveiled Critical Raw Materials Act, and how the EU and the US could achieve the common objective of increasing self-sufficiency for minerals and technology needed for green energy and the digital transition.

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Read more:

China January-July official FDI (in Chinese)


State Council study session on the development of China’s digital economy



PBOC Q2 monetary policy report (in Chinese)


New guidelines on recycling green energy equipment


European Chamber event: Battling it out – Decoding the Global Industrial Strategy Race, Episode 2: Critical Raw Materials



XINHE: Hello and welcome to China Shortcuts,

MARIANN: the European Chamber’s weekly catchup on China’s business landscape.


XINHE: According to data released by China’s Ministry of Commerce on 18th August, the actual use of foreign direct investment, or FDI, in the country dropped by the fastest rate recorded in over three years during the first seven months of 2023.

MARIANN: In yuan terms, FDI flows into China fell 4 per cent year-on-year in the January-July period, which was the largest decline since April 2020. In dollar denominated terms, the decline was as steep as 9.8 per cent. At the same time, the number of newly established foreign-invested companies grew 34 per cent compared to the same period last year, surpassing 28 thousand. While data provided by the Ministry did not include a detailed breakdown, it was highlighted that direct investments from certain countries, such as France and the United Kingdom, increased substantially year-on-year.


XINHE: On 21st August the State Council held a study session chaired by Chinese Premier Li Qiang, who highlighted the need for advancing the progress of the country’s digital economy, as a means to support China’s economic recovery and high-quality development.

MARIANN: The Premier called for efforts to promote independent innovation that could lead to breakthroughs in key core technologies. He also stressed the need to improve core industries in the digital economy, and to advance the comprehensive digital transformation of traditional sectors, including manufacturing, services and agriculture.

According to official data, in 2022, China’s digital economy reached 50.2 trillion yuan, with its share in the country’s GDP surpassing 40 per cent.


XINHE: In a quarterly report published on 17th August, China’s central bank hinted at the possibility of further monetary easing, after monthly loans dropped to the lowest level recorded in 14 years.

MARIANN: The report also came as concerns over deflation were amplified by a year-on-year drop in both consumer and producer prices in July. Another key concern for the central bank is the weakening yuan. While it vowed to maintain the stability of the foreign exchange market, the People’s Bank of China also highlighted the need to refrain from overadjusting the currency.  


XINHE: On 17th August, China’s National Development and Reform Commission announced new guidelines on recycling equipment used in the production of wind and solar energy.

MARIANN: The necessity for the guidelines was prompted by the fast development of the green energy sector, which has accelerated the speed of industrial upgrading and is expected to lead to the large-scale decommissioning of certain production equipment.  The newly issued guidelines are aimed at promoting the recycling of decommissioned equipment and standardising the harmless disposal of solid waste.


XINHE: Faced with an increasingly unstable geopolitical and economic environment, industrial policy has become a core component on the agenda for the world’s three largest economies – the United States, China and the European Union. Their strategies and regulations on renewable and low-carbon energy technologies, raw materials and technologies of the future are likely to result in profound implications for global supply and value chains while reshaping industries, especially high-technology sectors such as semiconductors.

MARIANN: The European Chamber has launched an event series on the ongoing global race in industrial strategy, in order to decode its implications on the outlook for both geopolitics and trade, as well as how it may impact the corporate strategies of multinational companies.

XINHE: Join us on 30th August online or in person in Beijing for the second event of the series, which will focus on the EU’s recently unveiled Critical Raw Materials Act and how it resonates with the US Inflation Reduction Act. Experts will also share their insights on how the EU and the US could achieve the common objective of increasing self-sufficiency for minerals and technology needed for green energy and the digital transition.


MARIANN: Thanks for listening. Tune in again in September, when we will return with our weekly episodes.

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

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