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You are at:Home » Is FDI in China declining? Weibo users reject mass escape theory
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Is FDI in China declining? Weibo users reject mass escape theory

Adnan MaharBy Adnan MaharFebruary 12, 2025No Comments5 Mins Read2 Views
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tHis China’s internet is bustling with debates over foreign direct investment in the country. catalyst? The article on the homepage of “People’s Daily Title” shows that there was a massive withdrawal of foreign capital from China? The discussion revolves around prominent contradictions. Actual foreign capital inflows fell 27.1% in 2024, but the number of newly established companies with foreign funds increased by 9.9%.

This contradiction promoted competing narratives. Many in China see this as a change in investment patterns rather than a massive account of Exodus. And the general discourse framing decline as part of the evolution of the economy rather than a complete capital flight.

Not a retreat, but a conversion

Battles are now won by shaping the story. It is exactly what is being developed on the Chinese Internet. The official country response reframes concerns about capital flight, calling them a sign of “economic upgrades.” People’s daily newspapers claim that foreign capitals are not disappearing, they are changing.

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This article is depicted in parallel with Walmart’s strategy in China. Hypermarket is expanding its operations in the country, but Sam’s Club (Walmart’s Premium, membership-based retail division) expanded and store No. 52 opened in Z Jiang in December 2024.

Additionally, Walmart’s total sales in China increased 17% year-on-year in the third quarter, reinforcing claims that businesses are adapting rather than leaving.

Every day, people are in a more optimistic voice. “Walking with China is walking with opportunities, and investing in China is investing in the future.” This story coincides with the broader government message. China remains an attractive investment destination, but its priorities are evolving. State media will diminish FDI as a natural progression in a mature economy. While many companies may be retreating, tech and service-driven companies continue to invest and prioritize quality over quantity.

Jiang Xijiang Province, a professor at the University of China Academy of Social Sciences, is reinforcing this perspective. She argues that while some foreign companies struggle to maintain their pace as China’s industrial competitiveness grows stronger, others will readjust their presence. With market access, policy incentives and expanding resilient supply chains, China continues to attract capital in the high-tech sector. Rather than shutting down, she argues that China is using its openness to sharpen its economic advantage.

Read again: China’s 2025 Foreign Policy – Trump’s Uncertainty could bring Beijing closer to Europe

Competing stories

The broader questions remain. Does China’s FDI shift indicate economic resilience or fundamental vulnerability? Over the past few months, China’s social media debate highlights how major international financial institutions have strengthened Chinese assets holdings and promoted what is called “Chinese fever” in Chinese capital markets I’m doing it. Investment giants such as JP Morgan, Blackrock and Morgan Stanley have doubled China’s assets, citing economic recovery, policy support and attractive ratings.

According to the Shanghai observer, financial institutions such as BlackRock, HSBC and Citi have upgraded their Chinese stock outlook, which has been attributed to changes in global capital flows. Some interpret this as a vote of confidence, while others warn that increasing foreign participation could increase market volatility.

The People’s Daily article quickly became one of Wybo’s most trending topics, earning over 6 million views. A widely shared comment states that “China remains an important destination for global capital.”

A Chinese commentator writing under the pseudonym has dismissed the FDI’s claims in Exodus, claiming that its capital remains in China and has re-entered the country. While some companies are exploring India, commentators argue that structural challenges limit its appeal. Instead, investment is changing towards China’s central and western regions, high-tech manufacturing, semiconductors, 6G, and biomedical, strengthening the country’s position as a global industrial hub. At first glance, Chinese commentators have stuck to an outdated story about India and unnecessarily drag it into debate, with their manufacturing sector in a “dead cycle” in which a stagnant workforce suppresses growth and blocks foreign investment. They claim to be stuck.

Read again: China’s strategy is working. India’s neighbors are drifting

External pressure, the future of FDI

Meanwhile, China Economic Weekly acknowledges external pressure and notes the slower geopolitical tensions and global investment trends. However, it coincides with many of China’s official, academic and grassroots discourses, highlighting that these hurdles should be addressed through high-quality development and a more open economic environment.

Broadly speaking, Chinese discourse about FDI trends falls into three categories.

The first group points out an increase in newly registered foreign companies as evidence of continued trust in the Chinese market and dismisses major withdrawal claims.

The second acknowledges decline, but sees it as part of the economic change into a more valuable industry. And the third ascribes the recession to external pressures, especially from Western government and media narratives, and claims that competition in China’s tech sector is driving out weaker foreign companies while domestic companies flourish. I’m doing it.

Midway through these discussions, the rise of Deepseek renewed confidence in young scientists, entrepreneurs, and some degree of leadership. This suggests that while external capital flows may be changing, domestic innovation continues to promote economic sentiment within China.

Whether this shift signals resilience or economic vulnerability ultimately depends on your perspective. China borders these challenges with “change,” but whether it is an opportunity or a risk, it is important to shape the next stage of Beijing’s economic trajectory. It plays a role.

Sana Hashmi is a Fellow of the Taiwan Asia Exchange Foundation. She tweets @sanahashmi1. The view is personal.

(Edited by Zoya Bhatti)



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Adnan Mahar
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Adnan is a passionate doctor from Pakistan with a keen interest in exploring the world of politics, sports, and international affairs. As an avid reader and lifelong learner, he is deeply committed to sharing insights, perspectives, and thought-provoking ideas. His journey combines a love for knowledge with an analytical approach to current events, aiming to inspire meaningful conversations and broaden understanding across a wide range of topics.

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