China’s foreign investment drops to 25-year low

One of China’s new foreign investment indices fell to a 25-year low in the second quarter of this year, raising concerns about the extent to which geopolitical tensions and slowing economic recovery are affecting corporate confidence.

The foreign direct investment (FDI) slumped to just $4.9 billion in the April-June period, according to figures released last week by the State Administration of Foreign Exchange (SAFE).

That was down 87 percent from the same period last year and was the smallest amount in any quarter in data back to 1998. “The decline in the FDI scale is worrisome,” said Michelle Lam, economist at the Greater China Division of Société General.