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Foreign direct investment (FDI) in China fell by 28.2%, amounting to 412.5 billion yuan (approximately $57.94 billion) in the first five months of 2024 compared to the same period last year. The Chinese Ministry released this data on Saturday.

Despite this decline, 21,764 new foreign-invested firms were set up across China during the reporting period. This represents a 17.4% increase, according to the Xinhua News Agency, citing the Ministry.

A ministry official stated that “the scale of foreign investment in actual use is still at a historically high level.” The official attributed the drop mainly to a high comparison base from last year.

The manufacturing sector received 28.4% of the total FDI inflow, totaling ¥117.1 billion. This marks an increase of 2.8% points from the same period last year, indicating continued improvement in investment structure.

FDI inflows into smart consumer equipment manufacturing and professional technical services rose dramatically, by 332.9% and 103.1% year-on-year, respectively.

Meanwhile, China has seen significant improvement in the World Competitiveness Ranking 2024 due to its strong economic performance. Arturo Bris, director of the International Institute for Management Development (IMD) World Competitiveness Center, noted this improvement.

The new ranking released by the IMD on Tuesday revealed that Singapore remains the world’s most competitive economy. However, China is closing the gap, climbing seven positions thanks to its robust economic recovery post-pandemic.

Bris highlighted that “the Chinese performance this year is interesting, with a significant improvement of seven positions. It is one of the countries that has improved the most. Certainly, we see China climbing to the top 10 sooner rather than later,” Bris told Xinhua via video link on Tuesday.

“China now holds the 14th position, up from 21st last year. This improvement is primarily due to the strong economic performance after COVID,” he explained.

Bris also mentioned that corporate governance practices in Chinese companies have improved. Additionally, there is better access to talent and financing for technologies in companies. This points to a more favorable business environment provided by the government, he said.

Asia is the big winner this year, with countries like China, Singapore, Thailand, and Indonesia all improving their positions in the competitiveness ranking, Bris added.

He also predicted more fragmentation and protectionism in the global economy in the coming years. Bris noted that “countries with better domestic markets, access to commodities, and natural resources like China are going to perform much better compared to Europe or Latin America. China is expected to perform very well in a fragmented economy.”

The World Competitiveness Ranking 2024 showed that Switzerland ranked second, and Denmark ranked third.

The ranking also indicated that emerging markets are catching up with more advanced economies, particularly in innovation, digitalization, and diversification.

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