China sees more outflows of foreign direct investment than inflows – ET Auto
China sees more outflows of foreign direct investment than inflows ETAuto
sdgtalks
China Sees More Outflows of Foreign Direct Investment Amid Rising Tensions with the US
China, for the first time, has seen more outflows of foreign direct investment (FDI) than inflows as tensions rise with the US over semiconductor technology and concerns about a rise in anti-spying activity heighten risks, Nikkei Asia reported.
The State Administration of Foreign Exchange released the figures in balance-of-payments data for the July-September quarter on Friday. FDI reached minus USD 11.8 billion, with more withdrawals and downsizing than new investments for factory building and other purposes. It is the first time that a negative figure has been marked in data since 1998, according to Nikkei Asia report.
Foreign investment had remained sluggish after it witnessed a sharp fall in the April-June quarter of 2022, when the Chinese economy was in turmoil due to the zero-COVID lockdown in Shanghai, Nikkei Asia reported.
Earlier in September, the Japanese Chamber of Commerce and Industry in China, in its survey of member companies, found that nearly half of respondents said they would not invest in China at all in 2023 or invest less than in 2022.
According to the survey conducted by the American Chamber of Commerce in China last fall, 66% of member respondents cited rising tensions in bilateral relations as a business challenge in China.
Earlier in August, the US announced stricter restrictions on chip and artificial intelligence investment in China. Although the US has been coordinating with China ahead of the meeting between US President Joe Biden and his Chinese counterpart Xi Jinping in November, the US remains committed to technology restrictions.
According to US research firm Rhodium Group, China’s share has already been reduced from 48% in 2018 to 1% in 2022. In contrast, the US share witnessed a rise from zero to 37%. Meanwhile, the combined share of India, Singapore, and Malaysia increased from 10% to 38%.
While Chinese firms have been improving their competitiveness, some foreign companies are opting to leave China. Earlier in October, Mitsubishi Motors announced that it would withdraw from production in China, according to Nikkei Asia report.
Yusuke Miura, a senior researcher at the NLI Research Institute, said, “Foreign companies are becoming increasingly concerned about authorities’ emphasis on security, and it is unlikely that their cautious stance towards China will change quickly,” Nikkei Asia reported.
China is making efforts to make its own chip supply chain in anticipation of prolonged tensions with the US. However, the procurement of necessary equipment and parts from foreign nations has been slow. If the pace of technological innovation and productivity growth witnesses a slow pace, it could put downward pressure on the economic growth of China.
Sustainable Development Goals (SDGs)
- Goal 8: Decent Work and Economic Growth – The negative figure in China’s FDI highlights the challenges in maintaining economic growth and attracting foreign investment, which are key components of Goal 8.
- Goal 9: Industry, Innovation, and Infrastructure – China’s efforts to develop its own chip supply chain align with the objective of promoting sustainable industrialization and fostering innovation.
- Goal 17: Partnerships for the Goals – The tensions between China and the US underscore the importance of fostering international cooperation and partnerships to achieve the SDGs.
SDGs, Targets, and Indicators Analysis
1. Which SDGs are addressed or connected to the issues highlighted in the article?
- SDG 8: Decent Work and Economic Growth
- SDG 9: Industry, Innovation, and Infrastructure
- SDG 16: Peace, Justice, and Strong Institutions
The issues highlighted in the article are related to foreign direct investment (FDI) outflows from China, tensions with the US over semiconductor technology, and concerns about anti-spying activity. These issues are connected to SDG 8, which focuses on promoting sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all. They are also connected to SDG 9, which aims to build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation. Additionally, the article mentions rising tensions in bilateral relations as a business challenge in China, which relates to SDG 16’s goal of promoting peaceful and inclusive societies for sustainable development.
2. What specific targets under those SDGs can be identified based on the article’s content?
- Target 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7% GDP growth per annum in the least developed countries.
- Target 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product.
- Target 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all.
Based on the article’s content, the specific targets that can be identified are related to economic growth (Target 8.1), sustainable industrialization (Target 9.2), and promoting the rule of law and access to justice (Target 16.3).
3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?
- Indicator for Target 8.1: GDP growth rate
- Indicator for Target 9.2: Industry’s share of employment and GDP
- Indicator for Target 16.3: Business challenges related to bilateral relations
The article mentions the negative figure of FDI in China, which can be used as an indicator for measuring progress towards Target 8.1 (sustainable economic growth). The article also discusses tensions in bilateral relations as a business challenge, which can serve as an indicator for measuring progress towards Target 16.3 (access to justice and rule of law). However, there is no specific mention of industry’s share of employment and GDP, which is the indicator for Target 9.2.
4. Table: SDGs, Targets, and Indicators
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 8: Decent Work and Economic Growth | Target 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7% GDP growth per annum in the least developed countries. | GDP growth rate |
| SDG 9: Industry, Innovation, and Infrastructure | Target 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product. | Industry’s share of employment and GDP |
| SDG 16: Peace, Justice, and Strong Institutions | Target 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all. | Business challenges related to bilateral relations |
Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.
Source: auto.economictimes.indiatimes.com
Join us, as fellow seekers of change, on a transformative journey at https://sdgtalks.ai/welcome, where you can become a member and actively contribute to shaping a brighter future.
