China foreign investment slides to 4-year low as anti-monopoly probes widen

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Foreign direct investment into China, a gauge of external confidence, slumped to a four-year low amid antitrust probes into multinational companies that have spurred a letter of complaint from the U.S.
Inbound investment was $7.2 billion in August, down 14 percent from a year earlier, the Ministry of Commerce said today in Beijing after a 17 percent drop in July. It was the first back-to-back decline of more than 10 percent since 2009, based on previously reported data compiled by Bloomberg.
U.S. Treasury Secretary Jacob J. Lew said in a missive to Vice Premier Wang Yang that China is using competition law to force companies to cut prices its consumers pay for products relying on foreign intellectual property, according to a person with knowledge of the correspondence. Lew said such steps might have consequences for bilateral ties, according to the person, who asked not to be identified because the letter isn’t public.
“I don’t know where this is going in the future, but it will not go in a direction that’s favorable for foreign investment,” said Niu Jun, professor at Peking University’s School of International Studies in Beijing. “The impact on Sino-U.S. relations will be significant. If this spreads into the economic realm, or a campaign like that seen against Japanese goods, it is hard to say what will happen.”

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