Net fund outflows from China surging

Singapore: Foreign businesses have been pulling money out of China at a faster rate than they have been putting it in, a media report said on Tuesday citing official data.The country’s slowing economy, low interest rates and a geo-political tussle with the US have sparked doubt about its economic potential, says the BBC report.

All eyes will be on a crucial meeting between Chinese and US Presidents Xi Jinping and Joe Biden this week.But businesses appear to be already erring on the side of caution.

“Anxieties around geopolitical risk, domestic policy uncertainty and slower growth are pushing companies to think about alternative markets,” says Nick Marro from the Economist Intelligence Unit (EIU).

China recorded a deficit of $11.8bn (£9.6bn) in foreign investment in the three months to the end of September - the first time since records began in 1998, the BBC reported.This suggests that foreign companies are not reinvesting their profits in China, rather they are moving the money out of the country.

“China is currently facing slower growth and needs to make some corrections,” says a spokesperson for the Swiss industrial machinery manufacturer Oerlikon, which pulled $277 million from the Asia giant last year.

“In 2022, we were one of the first companies to transparently communicate that we expect the economic slowdown in China to impact our business,” the spokesperson adds.