Einar H. Dyvik
Research expert covering Nordics and global data for society, economy, and politics
Foreign direct investment (FDI) into China - statistics & facts
China has long been one of the world’s most sought-after destinations for foreign capital, but its appeal is visibly eroding. Annual FDI inflows into China peaked at 189.13 billion U.S. dollars in 2022, then fell to 116.24 billion in 2024 and an estimated 104.66 billion in 2025, the lowest level since 2010. Mounting geopolitical friction, tighter regulatory scrutiny in Western home markets, and persistent questions over investor protections are all pulling in the same direction. Through the first five months of 2026, cumulative FDI inflows stood at 327.29 billion yuan, down 8.6 percent from the same period the year prior. The downtrend has not yet bottomed out.
Western capital pulls back while policy diverges
The sharpest structural shift in China’s foreign direct investment (FDI) composition is the retreat of Western investors. U.S. direct investment in China amounted to just 2.74 billion U.S. dollars in 2024, well below prior-cycle highs. European FDI in mainland China fell to 8.97 billion U.S. dollars in 2024 from a recent peak of 14.51 billion in 2023. Sentiment has followed capital out the door: a 2026 survey of U.S. companies operating in China found that China’s business environment had worsened according to 28 percent of respondents, while only 20 percent reported improvement. Policy on both sides has codified the divergence. China’s Foreign Investment Law, enacted in 2019, formally guarantees equal treatment for foreign and domestic enterprises and prohibits forced technology transfers, though Western governments argue enforcement has been inconsistent. On the U.S. side, a 2023 executive order on outbound investment restricts American capital flows into Chinese semiconductor, quantum computing, and artificial intelligence sectors – economic decoupling written into law.
ASEAN fills the gap left by the West
As Western flows contract, Southeast Asian nations are emerging as a structural counterweight. Singapore alone channeled 10.69 billion U.S. dollars into mainland China in 2024, ranking second only to Hong Kong SAR among leading FDI source countries. The sectoral breakdown tells the story more precisely than the headline figure: ASEAN investment by sector was concentrated in manufacturing at 37.1 percent of total ASEAN inflows, followed by leasing and business services at 15.1 percent and scientific research and technological services at 13.0 percent. This is supply-chain integration, not financial opportunism.
China retains investor standing, but structural headwinds persist
China has not dropped off the global investment map. On the global FDI confidence index compiled in 2026, China ranked fourth worldwide with a score of 2.11, behind only the United States, Canada, and Japan. Index scores and committed capital are diverging, however. Geopolitical decoupling, technology export controls, and unresolved legal enforcement concerns show few signs of reversing. Beijing’s central challenge is to rebuild foreign investor confidence within a framework that Western capitals increasingly view as selectively applied.
