Foreign direct investment into China fell by 5% annually in the first half of 2026, easing from the 8.6% decline in the first five months of the year. Despite extending three-year streak of year-to-date declines in FDI, it was the smallest since little after the streak began in July of 2026. It prolonged the rebound from the record-slump of -31.5% in August of 2024, when risks of a deflationary spiral and the peak of low consumer spending dented foreign investment demand. Still, opaque balance sheets and risks that protectionist policies may curb manufacturing exports continued to weigh on the Chinese economy.