China's Foreign Direct Investment (FDI) continues its downward trend, according to recently updated data. In May 2025, FDI reached a new low of -13.20%, a further decline from April's figure of -10.90%. This significant decrease reflects ongoing challenges faced by the world’s second-largest economy in attracting foreign capital.
The drop comes amid global economic uncertainties and a higher risk perception amongst international investors. Several factors could be influencing this ongoing descent, including geopolitical tensions, trade uncertainties, and domestic economic reforms that may have created a cautious environment for foreign financiers.
As of June 20, 2025, economists and analysts are concerned about the potential long-term impact of this trend. With FDI serving as a crucial component for fueling China's economic growth and technological advancement, the country may need to reassess its policies and strategic approach to regenerate interest and confidence among international investors.
