China's struggle to attract foreign investors and challenges in attracting overseas companies have shown signs of improvement in the fourth quarter of 2023. Despite the pressures posed by overseas central banks' interest rate hikes, China's real economy and securities markets attracted positive net inflows of foreign investment [d73eda6e]. The State Administration of Foreign Exchange reported a net total of $62.1 billion in equity-based foreign direct investment (FDI) flowing into China last year, with a noticeable surge in the fourth quarter compared to the previous one. China also attracted a net foreign inflow of securities investment in 2023, with the size of net inflows reaching the highest level in almost two years in the fourth quarter [d73eda6e].
These positive figures indicate that more foreign investors are investing in China, developing their businesses in the country, and allocating renminbi-denominated assets. The improvement in FDI inflows can be attributed to the easing pressure of global industrial chain adjustments and improved prospects of returns on investment in China amid a steadier economic recovery. Capital inflows into Chinese onshore bonds also picked up in the fourth quarter, as the US Federal Reserve stopped interest rate hikes in September, sparking expectations of rate cuts in 2024 and causing the renminbi to rebound [d73eda6e].
While the fourth quarter of 2023 showed signs of recovery, it is important to note that China recorded a deficit in FDI of $152.5 billion in 2023, compared to a surplus of $32.3 billion in 2022, according to the State Administration of Foreign Exchange. This deficit highlights the challenges China still faces in attracting foreign investment and the need for continued efforts to create a more business-friendly environment [d73eda6e].
Foreign direct investment (FDI) in South Korea reached a record high of US$7.05 billion in the first quarter of 2024, marking a 25.1% increase compared to the same period last year [83223f7b]. The surge in foreign investment can be largely attributed to the strength of the manufacturing sector, with foreign investment in manufacturing growing by 99.2% compared to the previous year. Investments from Greater China and Japan accounted for nearly half of the total, with investments from Greater China increasing by 146.7% and Japan increasing by 281.8%. Greenfield investments decreased by 7.1% compared to the previous year, while merger and acquisition investments increased by 115.4%. The increase in investments in non-capital regions is expected to contribute to regional economic revitalization [83223f7b] [d73eda6e].
The Department of Trade and Industry (DTI) highlighted the positive trend in foreign direct investments (FDI) for January 2024, with net inflows reaching US$907 million, an 89.9% growth compared to January 2023. The increase was driven by investments in manufacturing, real estate, construction, and wholesale and retail trade sectors. This marks the third consecutive month of expansion, following growth of 28% in November and 30% in December. DTI Secretary Fred Pascual stated that the surge in FDIs reflects the confidence and trust the global business community has in the Philippines' economic potential. The upward trajectory is primarily driven by a 173.2% increase in nonresidents' net investments in debt instruments, reaching US$820 million. Reinvestment of earnings also saw a positive trend, rising by 16.4% to US$99 million. Although net equity capital placements saw a slight outflow of US$11 million, equity investments primarily came from Japan and the United States. The DTI aims to attract significant investments in key sectors and high-growth industries to create a more robust and resilient economy. The announcement comes ahead of the Trilateral Economic Ministers Meeting scheduled for April 11, 2024, in Washington, D.C., which aims to explore new trade and investment avenues. The meeting will include US Commerce Secretary Gina Raimondo, Japan’s METI Minister Ken Saito, and DTI Secretary Fred Pascual. The Philippines is focused on enhancing its investment climate and expects the trilateral meeting to unlock further trade and investment opportunities. The government aims to improve infrastructure, upskill workers, ensure environmental sustainability, and invigorate the private sector with meaningful initiatives. [09714648] [83223f7b]
Non-European Union citizens increased investments in Greek realty in 2023, with investments from non-EU countries reaching 1.48 billion euros, a 17.4% increase compared to 2022. Investments from EU countries amounted to 649 million euros, down 7.2% year-on-year. The Greek real estate market received a total of 2.13 billion euros in investments in 2023, a historic high. Hong Kong, Singapore, and mainland China were the largest buyers, making investments of 460 million euros, which constituted 62.2% of all investments from non-EU countries and 21.5% of all foreign investments in Greek realty. The Turkish market also saw dynamic growth, with 107 million euros invested in 2023, a 132% increase from the previous year. Switzerland ranked second with 271 million euros in investments, a 51.3% increase from 2022. US investors spent 149 million euros in 2023, a 10.2% decrease attributed to the deteriorating US economic sentiment. [a81ffcc2] [d73eda6e]