As foreign investments exit and factories shut down, the Chinese government’s report on “foreign investment data” shows a puzzling increase.
Recently, the Ministry of Commerce of China released data claiming a “recovery of foreign investment,” stating, “By the end of September this year, about 48,921 new foreign-invested enterprises were established, a year-on-year increase of approximately 16.2 percent.” Strangely, during the same period, the “actual foreign investment amount” was about 574
billion yuan, a year-on-year decrease of approximately 10.4 percent. This data is quite odd—while the number of foreign-invested companies is rising, the actual foreign investment is declining.
In other words, while it appears that more companies are registering as foreign-invested enterprises, the invested capital is shrinking. This could indicate that the newly registered companies are smaller in scale or merely formal registrations without actual capital injection.
According to media reports, the Chinese government has lowered the threshold for registering foreign-invested enterprises. Some companies are now registering with a capital of only tens of thousands of yuan, far below the billions previously required for large manufacturing investments.
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