Plunge in Europe's investments in China amid virus curbs, slowdown

Only a few German manufacturers account for bulk of ventures from region

European corporate investment in China is falling steeply and now mostly limited to a handful of multinationals, three new reports show.

The slackening in investment is the latest in a series of ominous signs for the Chinese economy.

The real estate market is slumping, with prices declining in many Chinese cities as the volume of transactions plummets.

Consumer spending is drying up because of stringent "zero Covid-19" policies that have led to lockdowns in many cities.

And American investment in China is also faltering because of geopolitical tensions.

China's published statistics for foreign direct investment show that it is gradually rising overall.

But the bulk of what China counts as foreign investment is money arriving from Hong Kong, which tends to be composed of mainland money that has been briefly routed through Hong Kong as a tax-minimisation measure.

A new analysis by Rhodium, a New York research firm, shows that so-called greenfield investments from the European Union and Britain in new factories and other installations have plunged.

These investments fell to just under US$2 billion (S$2.8 billion) in the first half of this year, compared with US$4.8 billion in the first half of last year.