China’s Slowing FDI Inflows

(In an interview with CCTV China 24 on August 16, 2012, Pro. Zhu Ning, Deputy Director of SAIF, analyzed China's latest slowing FDI inflows.)

The trend has been starting in the past two years and the current month results are not that surprising, especially given that the global situation is not improving. And also foreign investors are holding their hands and think about what is going to happen to Chinese economy in the coming 6 to 12 months. So, it is not encouraging but it is not too surprising as well.

The situation will not improve any time soon, just given that the global economy is not improving by much in the next 6 to 12 months. And in China, the foreign export is slowing down and domestic consumption apparently has not yet picked up. So, there is not a lot of encouraging sight at the moment to foreign investors for them to put more money into China in the near future.

Money wise or capital wise is not as much of a deal as many people believe it to be. And given that abundance of capital flowing in China right now and given that the size of China’s economy and the FDI is not as important as used to be. However, what is more important here is probably the skills that the management know how they innovate, which will help China’s economy to upgrade its industry and also to change its economic growth model. So, that is what Chinese people really need the foreign investors and the foreign companies to bring in China at the moment.