Japan, US, ASEAN direct investment in China drops dramatically, as China considered less attractive

By: Jalenn Turre, Marketing, Business & Social Media Strategist

“analysts say, not only Japanese, but an increasing number of foreign companies are finding it less financially attractive to move production to the world’s second-largest economy”. China’s economy is shrinking! – source: China Daily Mail

china-map_geologydotcom

Credit: geology.com

China Daily Mail

China's Economy China’s Economy

Japan‘s direct investment in China in 2014 dropped 38.8 percent from the previous year to $4.33 billion, the Commerce Ministry said Thursday.

The plunge, which compares with a decline of about 4 percent in 2013, reflects soured bilateral relations over territorial and wartime historical issues, as well as rising labour costs in China.

In addition, analysts say, the depreciation of the Japanese yen is making it more difficult for Japanese companies to expand operations in China.

This is the biggest shrinkage since 1989, when Japan’s investment in China fell about 35 percent on year following the 1989 Tiananmen Square military crackdown, which had an immediate chilling effect on Beijing’s foreign relations, according to the Japan-China Economic Association.

In 2014, China attracted a total of $119.56 billion in foreign investment, up 1.7 percent year-on-year, according to official figures from the Chinese ministry. China is known to exaggerate figures.

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