(Yicai) Sept. 13 -- The high-tech industry’s share of foreign direct investment in China climbed further last year, despite an overall decline in FDI into the world’s second-largest economy, the commerce ministry said in a new report.

Actual FDI in use in China’s high-tech sector was USD61 billion in 2023, accounting for 37.4 percent of the total, up from 36.1 percent the year before and 28.3 percent in 2019, according to the report released at the 24th China International Fair for Investment and Trade on Sept. 9.

China’s FDI in actual use fell 13.7 percent to USD163.3 billion in the year, mainly because of the slowdown in global economic growth and geopolitical tensions, the report said. The figure made up 12.3 percent of the global total, staying above 10 percent for the fourth straight year.

FDI into the manufacturing of chemicals used in the information technology sector surged 305 percent year on year, making it the fastest-growing area for FDI, according to the report. The medical equipment and instrumentation production field saw FDI jump 25 percent.

Scientific research and technical services were the biggest service sector draws for FDI, accounting for 18 percent of the total, followed by leasing and business services at 16.2 percent and communication, software, and IT services at 10.1 percent.

Global FDI fell 2 percent to USD1.3 trillion last year, according to June’s World Investment report from the United Nations Conference on Trade and Development. The decline exceeded 10 percent when the big swings in investment flows in a few European conduit economies are factored out.

One reason for the global decline was the growing protectionist tendencies in the advanced economies. Last year, 86 percent of the investment policy measures taken by developing countries were more favorable to investors, while 57 percent in developed countries were less favorable, with restrictions used to address national security concerns, the UNCTAD report said.

In the medium and long term, the structure of the global industrial chain will continue to develop toward regionalization, with China, the US, and Europe forming the three major production blocs, James Zhan, chairman of the Global Alliance of Special Economic Zones, said at the CIFIT.

Global transnational investment is expected to rebound in the next two years, Zhan noted. However, it will mainly be a restorative rebound rather than a substantial expansion, as it will be difficult to return to the high level seen before the Covid-19 pandemic, he added.

Editors: Dou Shicong, Futura Costaglione