Investment

Western firms shift investment from China to India as worries mount

Published

1 year ago

September 13, 2023

BEIJING, Sept 13 (Reuters) – U.S. and European firms are shifting investment away from China to other developing markets, a report from Rhodium Group showed, with India receiving the vast majority of this redirected foreign capital, followed by Mexico, Vietnam and Malaysia.

These companies are turning their backs on the world’s second-largest economy even as its share of global growth continues to increase, highlighting how concerns over China’s business environment, economic recovery and politics weigh heavy on the minds of foreign investors.

The value of announced U.S. and European greenfield investment into India shot up by some $65 billion or 400% between 2021 and 2022, Wednesday’s report said, while investment into China dropped to less than $20 billion last year, from a peak of $120 billion in 2018.

“Diversification is well underway,” the research organisation said, but acknowledging: “it will take years for advanced economies to achieve the objectives behind their ‘de-risking’ policies,” as China is so central to global supply chains.

Low production costs and the prospect of a massive middle class drew the first foreign firms to China in the late 1980s, as the country abandoned its Maoist economic model. But with consumers now tightening their purse strings and production costs continuing to rise, the market is losing its sheen.

The shift comes as Chinese local authorities struggle to revive foreign investment after an economically bruising pandemic and property crisis depleted their coffers.

Western companies are stepping up greenfield investment in these markets to give them options when sourcing assembled goods and geopolitically sensitive commodities, such as semiconductors, as well as to reduce their dependence on China in their supply chains, the report said.

But the authors cautioned that diversification is unlikely to result in a rapid decline in exposure to China because the markets foreign firms are investing in are heavily reliant on trade and investment with the Asian giant themselves.

As a result: “it would not be surprising to see China’s overall share of global exports, manufacturing and supply chains continue to rise, even as diversification away from China accelerates.”

Reporting by Joe Cash; Editing

Our Standards: The Thomson Reuters Trust Principles.

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Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

1 day ago

October 16, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

6 days ago

October 11, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX composite little changed in late-morning trading, U.S. stock markets down

Published

1 week ago

October 10, 2024

Anne Joseph

TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.

The S&P/TSX composite index was up 0.05 of a point at 24,224.95.

In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.

The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.

The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.

The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.

This report by The Canadian Press was first published Oct. 10, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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