China’s shrinking FDI and what it means for its economy

1. FDI into China in 2023 increased by the lowest amount since the early 1990s amid growing disinvestment and concerns about the country’s sluggish economic recovery.

2. According to data released by the State Administration of Foreign Exchange on Sunday, China’s direct investment liabilities – including foreign companies’ retained earnings in the country – reached $33bn (237.53bn yuan) in 2023. The measure is 82% lower than the 2022 level and the lowest recorded since 1993, one year after private business ownership gained full legal status in the country.

3. In November 2023, Chinese officials reported a $11.8bn drop in direct investment liabilities during the third quarter of 2023, showing how growing tensions between Beijing and the West impact the country’s investment climate.

4. Despite the swift economic recovery following Covid, FDI inflows into China slowed in 2022 as a result of the government’s Zero Covid policy – in place until the end of that year – coupled with economic policy uncertainty.

5. At the same time, Beijing has stepped up its crackdown on foreign companies. In January 2024, Beijing launched an anti-dumping investigation into French brandy imports. The announcement came a few weeks after the EU Commission began investigating allegations of biodiesel dumping from China into the EU market and three months after Brussels said it was looking into claims that China was illegally subsidising its electric vehicle market.

6. The Chinese tech sector, however, has seen the most significant drop in market valuation, as continued pressure from the Chinese authorities wiped $1.1trn off China’s major tech companies between 2021 and 2023, according to Refinitiv data cited by Reuters.

7. The US Department of State warns that China’s market remains a “relatively restrictive environment for foreign investors” because of prohibitions on investment in key sectors, as well as unpredictable regulatory enforcement.

8. For that reason, many companies have diversified their investments away from China, instead announcing expansion plans in other Asian nations such as India, Malaysia, the Philippines and Vietnam.

Singapore's Smart Nation 2.0: Advancing AI Leadership and Resilient Digital Infrastructure

1. Singapore has announced plans to inject around £740m (S$1.2bn) into AI development over the next five years,

2. In 2023, Silicon Box, a semiconductor integration company, announced the launch of its $2bn semiconductor manufacturing foundry in Singapore.

3. Located in Tampines, the chip factory is expected to create more than 1,000 jobs with the backing from the Singapore Economic Development Board (EDB).

4. Silicon Box’s facility marks a step forward for Singapore’s ambition to expand its manufacturing industry by 50% by 2030.

5. It is also expected to increase Singapore’s appeal as a desirable location for AI, as semiconductor businesses look to diversify their manufacturing supply chains amid rising geopolitical concerns.

6. Singapore was among the first countries to publish an AI plan in 2019. In December 2023 it launched an updated version of the strategy, outlining ways to harness and use AI for economic empowerment.

7. The city-state took a proactive stance in AI governance by introducing AI Verify in May 2022 – the world’s first AI governance testing framework and software toolkit for companies.

8. Companies like Google, Meta, and Microsoft have already tested the AI Verify tool and provided feedback, demonstrating a collaborative effort towards promoting responsible AI use.

Malaysia's industrial output grows faster-than-expected in March, May 2024 official data shows

 1. Malaysia’s industrial output rose at a faster-than-expected pace in March from a year earlier with the manufacturing sector leading broad gains, the Department of Statistics Malaysia (DOSM) said.

2. The industrial production index — which measures output from factories, mines, and power plants — climbed 2.4% in March compared to the same month in 2023. That was better than the median 1.9% increase predicted in a Bloomberg survey but slower than February’s 3.1% year-on-year growth.

3. On a month-on-month basis, the index rebounded 7.5% in March from February’s decline of 6.3%.

4. The latest reading dovetails with modest improvement in factory output in major exporters China, South Korea, Vietnam and Taiwan over the same month. However, industrial production fell in Singapore while that of the US, Japan, and Thailand declined further in March.

Turkey's FDI Resilience: Strategies to Double Global Share by 2028

 https://www.investmentmonitor.ai/news/tur1. Foreign direct investment (FDI) inflows into Turkey have reached $10bn in 2023, according to the Central Bank of the Republic of Turkey (CBRT).

2. The figures released by the CBRT suggest FDI continues to pour into the country despite economic instability and a devastating earthquake that hit the southeast region of Turkey in February last year.

3. The Investment Office President A Burak Dağlıoğlu commented on the state of global investment in 2023: “Central bank policies and the current geopolitical situation have led to a decrease in global investment. We observed declines in global FDI ranging from 20% to 80% in many emerging economies, including Central and Eastern European countries (CEE) and BRICS countries. Despite challenging global conditions, exceeding $10bn in FDI volume is significant. 

4. The positive signals at the beginning of 2024 indicate a promising outlook for the Turkish economy, with increased investor interest. We expect a surge in investments in 2024, indicating a positive trajectory for the months ahead.”