China is having a hard time wooing foreign investors back

China is experiencing a decline in direct investment from foreign companies, indicating a shift in supply chains to reduce risk. Direct investment liabilities have been decreasing over the past two years, with a $11.8 billion contraction in Q3 2022. Despite efforts by the Chinese government to attract foreign investment, companies are skeptical about policy support and are repatriating earnings due to the interest rate gap between China and the US. Geopolitical concerns and rising manufacturing costs are also contributing to the decline in investment.