China's foreign investment turns negative for first time as companies withdraw funds amid economic uncertainty
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China's accumulated foreign direct investment reached $3.5 trillion, but in Q3 2022 it turned negative for the first time as foreign investors withdrew funds.
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This may reflect disillusionment with China's economic prospects and policies, as well as geopolitical tensions.
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But it also reflects companies moving spare cash out of China to earn higher returns as US rates rise and Chinese rates fall.
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The yuan is gaining ground internationally, with increased use in trade finance and lending to developing countries.
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Over 50% of China's international transactions are now settled in yuan, up from 6% in 2013, helped by sanctions on Russia.