Inbound Foreign Investment in China Surges 81% in 2020 During COVID-19 Pandemic

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Foreign investment in China surged in 2020 as the economy staged an advance81 recovery from the adverse impacts of the COVID-19 pandemic.

China attracted USD$520.6 billion in foreign investment in 2020 for an increase of 81% compared to 2019, according to a report released by the State Administration of Foreign Exchange (SAFE) on 26 March.

Foreign direct investment into China rose by 14% in 2020 to hit $212.5 billion, while the securities market saw a 73% increase in net inflows of foreign funds to hit $254.7 billion in total.

This included net inflows into Chinese bonds of $190.5 billion, for an 86% YoY increase, and net inflows into equities of $64.1 billion, for a 43% rise.

According to SAFE the lustre of the Chinese market in the eyes of foreign investors received a boost in 2020 from the country’s early recovery from the COVID-19 pandemic, as well as its implementation of prudent monetary policy and ongoing efforts to expand the opening of the financial sector.

Chinese outbound foreign direct investment in 2020 fell by 20% compared to 2019 to $109 billion. Security investment was a different story, with China’s net investment outflows into foreign securities rising 87% compared to 2019 to hit $167.3 billion. This included $131 billion in equity investments, for a 3.5-fold increase,

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