China’s foreign direct investment (FDI) contraction moderated in January, with the indicator registering a year-on-year decline of 5.70%, improving from a previous drop of 9.50%. Both the earlier and latest readings refer to January 2026, according to data updated on 2 March 2026.
The narrower decline suggests that while China continues to face headwinds in attracting foreign capital, the pace of outflow or reduced inflows has slowed compared with the prior reading. Investors will closely watch whether this easing contraction marks the beginning of a stabilization trend in FDI or merely a temporary improvement within a still-challenged investment environment.
For policymakers and markets, the January FDI data will feed into broader assessments of China’s external financing conditions and its appeal as a destination for global capital in early 2026.
