China saw markedly less investment from overseas last month as trade tensions with the US reached a peak, denting business confidence, the South China Morning Post reports.
Foreign direct investment (FDI) in November dropped 27.6% compared with a year earlier, according to the Ministry of Commerce, down to $13.6 billion. The slump brings total FDI for the year so far to $115.3 billion, a 1.2% annual decline.
FDI was already sliding in the two months before November. In October, FDI growth was at a four-month low of 7.3% y/y. The plummet in November came before the G20 summit in Argentina, where Presidents Xi Jinping and Donald Trump agreed to a 90-day trade war ceasefire.
Analysts say that the figures reveal the deeper economic damage the trade war was having on China. “The influence has spread to the micro level, hurting the confidence and expectations of entrepreneurs,” said Zhao Jian, head of the Atlantis Finance Research Institute.
Beijing deflected concerns regarding the data, however, saying that the decline was due to a high base last year.