3rd April 2024: China’s net FDI in 2023

This episode contains segments on:

  • China’s net foreign direct investment in 2023;
  • China’s official purchasing managers index (PMI) in March;
  • Caixin China general manufacturing PMI in March;
  • Profits at larger industrial companies in China in January and February.

From the Chamber’s side, an advocacy success has been achieved in food industry. Packaging requirements for five special dietary food categories are optimised following the Chamber’s recommendations.


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Read more:

China 2023 net FDI (Balance of Payments), SAFE


China official PMI, March, NBS


Caixin China General Manufacturing PMI, March


Industrial profits, 2024 January-February, NBS



RUI: Hello and welcome to China ShortCuts,

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


RUI: On 29th March, the State Administration of Foreign Exchange released revised data on China’s net foreign direct investment in 2023.

MARIANN: While the data was revised up from the preliminary number published late February, at 42.7 billion US dollars, China’s net FDI in 2023 was still the lowest level recorded since China joined the World Trade Organization in the year 2000. By comparison, the 2022 figure was almost four and a half times higher. As net FDI calculated by the State Administration of Foreign Exchange also includes retained earnings by foreign enterprises in China, the actual figure for FDI inflows into the country could be even lower. However, some of the decline in FDI can be explained by the RMB’s depreciation and an increase in interest rates in Europe and the United States. The combined impact of these trends is that multinational companies with excess cash and return earnings in China have been increasingly transferring those funds overseas to earn a higher investment return compared to investments in China. 


RUI: According to official data released by the National Bureau of Statistics on 31st March, manufacturing activity in China expanded for the first time in half a year.

MARIANN: The manufacturing purchasing managers index, or PMI, stood at 50.8 points in March. Readings above 50 points indicate growth. The uptick was primarily due to a sharp rebound in new orders, with an especially strong surge in new export orders. The rise in demand had a boosting effect on production. Despite these improvements, however, manufacturing firms remained cautious about hiring, with staffing levels in continuous decline for over a year.

Meanwhile, the non-manufacturing PMI indicated that growth in activity accelerated in May in the construction and services sectors. The breakdown of the data, however, showed that demand remained muted, and employment levels shrank further from February.  


RUI: A private survey conducted by Caixin and S&P Global also showed growth in manufacturing activity in March.

MARIANN: The March reading marked the fifth consecutive month of improvement in operating conditions in the sector. Wang Zhe, senior economist at Caixin Insight Group, attributed the positive findings to the effect of policies introduced in early 2024 to stabilise growth. However, he warned that the economy still faces downward pressures primarily stemming from the persistence of subdued employment, low prices and insufficient demand.


RUI: Profits at larger industrial companies in China increased over 10 per cent during the first two months of 2024 compared to the same period last year.

MARIANN: Despite the year-on-year increase however, the actual figure of 914 billion yuan was the still the second lowest recorded for the January-February period since 2019. A breakdown of the data by ownership structure revealed that equity-owned industrial firms recorded the highest profits during the first two months of the year. Foreign-owned companies profits increased by over 30 per cent year-on-year, but even so, the total amount remained under the levels recorded during the same periods in 2022 and 2021.


RUI: To accelerate the promotion of green and low-carbon development, the State Administration for Market Regulation released a set of restrictions on excessive packaging for food and cosmetics products in 2021, which came into effect on 1st September 2023.These standards specify the allowed ratios for empty spaces within the packaging of all food and cosmetics commodity categories.

MARIANN: The set ratios were unrealistically small for the special dietary food category, which includes infant formula, food for special medical purpose and sport nutrition foods. While the technical requirements for the production and packaging of these products are exactly the same as those for ‘ordinary’ food products, they were given stricter parameters. For instance, the ratio for ordinary cookies was set at almost seven times higher than for cookies for infants and young children.  

RUI: If manufacturers of special dietary foods had been compelled to follow these standards, they would have faced severe compliance costs, as well as difficulties being listed in online and offline markets. Furthermore, consumers who rely on certain products, especially due to existing medical conditions, would likely have lost access to these products.

MARIANN: The European Chamber has for a long time been engaging with the relevant authorities to highlight the risks and potential negative impacts of these requirements. On 29th March, the State Administration of Market Regulation issued an amendment to the relevant document, which, following the Chamber’s recommendations, optimised the requirements for five special dietary food categories.


RUI: Thanks for listening, and don’t forget to tune in again next week.

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

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