A gentle downtrend in foreign direct investment gave way to a steep drop last quarter and inflows to China slammed to their lowest since records began 25 years ago, raising the prospect that the long-term trend is turning.
Sources have told Reuters the Biden administration is likely to adopt new outbound investment restrictions on China in the coming weeks.
Japan, the U.S. and Europe have already restricted the sale of high-tech chipmaking tools to Chinese companies while China has hit back by throttling exports of raw materials.
To be sure, investment flows often fluctuate and many firms aren't leaving China completely or aren't leaving at all.
"A lot of our clients are worried about their exposure to China as a sole country of supply."
Persons:
Carlos Barria, Deng Xiaoping, Logan Wright, Biden, John Ramig, Buchalter, Daniel Seeff, Cardigan, Chi Lo, Lee Smith, Baker Donelson, Samuel Shen, Tom Westbrook, Winni Zhou, Jacqueline Wong
Organizations:
REUTERS, Corporate, China Markets, China's, Administration of Foreign Exchange, Investors, Reuters, Oxford Economics, Ministry of Commerce, Management, Thomson
Locations:
Pudong, Shanghai, SHANGHAI, SYDNEY, China, Japan, U.S, Europe, Haining, Peru, Hong Kong, Baker, Singapore