China's Foreign Investment Boom Ends Amid Concerns Over Policy and Costs
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China's foreign investment boom has ended as it saw its first ever quarterly deficit in foreign direct investment.
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Economists say China needs to improve policies to restore confidence and attract foreign investors who are concerned about political pressure and high borrowing costs.
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Foreign investment accounted for only 2% of China's GDP but brought technology, management, and competition. Easing travel restrictions could help retain investment.
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Experts recommend fiscal stimulus targeting low incomes to keep consumption strong, as that helps attract foreign investors.
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While some foreign investors may leave, most remain interested in China's huge market. Political pressure alone won't improve multinationals' supply chain security.