US investment in China dropped sharply by 28 percent, while foreign direct investment (FDI) maintained double-digit growth from January to April, the Ministry of Commerce of China said.
Economists said they believed the US investment decline is temporary, and the Chinese economy, over the long term, will provide US companies with increased investment opportunities.
US investment from January to April decreased to $1.03 billion and the number of US firms setting up in China also fell by 3.85 percent to 475.
In contrast, European Union investment rose by 23.42 percent to $2.64 billion. Investment from the Asia-Pacific region, including Japan, South Korea and Singapore, registered growth of 31.23 percent to $32.88 billion.
The ministry said that FDI for April rose by 15.21 percent, from a year earlier, to $8.46 billion, the fourth month that FDI witnessed double-digit growth this year.
“US investment could drop further over the short-term,” Song Hong, head of the Department of International Trade at the Chinese Academy of Social Sciences, said.
Song attributed this to a decline in US manufacturing, a key component of US investment, following the global financial crisis. He also said that with the recovery in the US economy, businesses that had invested in China were returning to the US market.
But others cited rising labor costs as a reason.
“We cannot ignore the fact that investment into China from developed nations, including the US, is slowing thanks to China’s rising labor costs,” said Zhang Yansheng, director of the Institute for International Economic Research under the National Development and Reform Commission.
US investment in China in 2010 grew by 13.31 percent year-on-year, compared to 31 percent for its total overseas investment, according to the United Nations Conference on Trade and Development.
Yuan Gangming, a researcher at the Center for China in the World Economy at Tsinghua University, said “the US is much too reliant on China” for investment to drop over the long term.
But US investors “probably have complaints, such as barriers”, he said.
In a survey of its member companies released last month the US Chamber of Commerce in China cited “bureaucracy, lack of management, ambiguous laws and infringement of intellectual property rights” as major challenges facing US firms here.
RCEP and China: Reimagining the future of trade in Asia
The Regional Comprehensive Economic Partnership (RCEP) could eventually usher in an era of much deeper regional integration: for corporates doing business in the region, their future success may well hinge on how adeptly they manage to navigate the evolution of Asia’s trade landscape under the RCEP.
Last month, 15 countries in the Asia-Pacific region – including the 10 member states of the Association of Southeast Asian Nations (ASEAN) as well as China, Australia, Japan, New Zealand, and South Korea – signed the landmark Regional Comprehensive Economic Partnership (RCEP) on the final day of the 37th ASEAN Summit.(more…)
Thailand ready to ink big Chinese-backed trade deal
The RCEP will cover all 10 Asean member states plus five partners: China, Australia, Japan, New Zealand, and South Korea and will take effect from the middle of 2021 if at least six Asean members and three partners agree to its terms.
Great Wall Motor (China) takes over GM factory in Thailand
The Thai production hub will become operational in the first quarter of 2021 with automobile production capacity of 80,000 units per annum.
Thailand approves COVID-19 AstraZeneca vaccine for emergency use
The first lot of 50,000 doses of COVID-19 vaccine developed by AstraZeneca will arrive in Thailand early next month, after...
Interprovincial travel in Thailand amid COVID-19 controls
The State Railway of Thailand (SRT) is suspending 57 additional train services from 26 January, 2021, as part of the...
Covid-19 puts flexible space markets under strain
In the wake of operator defaults, landlords will be forced to re-evaluate the role of flexible space in their portfolios.
Thailand to put world’s largest floating solar farm into use this June
The facility, which generates power on a water surface of 72 hectares, was originally scheduled for operation in December last...
TAT launches virtual tours to 4 top destinations in Thailand
Once inside an attraction, visitors can move around using the cursor, while some of the attractions have information about its...
Thailand’s automotive sector expected to produce 1.4m cars this year
This increase in output is a result of the recovery of domestic and export markets, with the annual output for...
Subscribe via Email
Forex1 week ago
Leverage from Forex Brokers & How Beginners Can Benefit from It
Economics6 days ago
Thai economy to grow 4% in 2021 following 6.5% decline in 2020
National6 days ago
Human trafficking cases in Thailand hit decade low due to COVID-19
Banking1 week ago
Can Fintech drive a strong post-COVID-19 recovery in Asia?