China's Foreign Investment Plunges to Lowest Level Since 1998 Amid Tighter Regulations
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China's foreign direct investment (FDI) dropped to $4.9 billion in Q2 2023, an 87% decrease and the lowest level since 1998.
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The FDI drop indicates growing difficultly for foreign companies to conduct business in China due to restrictive new laws.
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Laws limiting risk assessment and due diligence make it hard for companies to comply with China's rules and regulations in other countries.
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China has taken small steps to address the FDI drop, like relaxing capital controls in Shanghai and Beijing.
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Experts say the FDI drop signals a long-term economic decline in China and that Xi Jinping's policies are undermining growth.