Foreign investors withdrew a record amount from China last quarter, reflecting deep pessimism about the world's second-largest economy. China's direct investment liabilities fell by nearly USD15bn in April-June, marking only the second time this figure has turned negative. If the trend continues, 2024 could see the first annual net outflow since at least 1990. Foreign investment has slumped since a peak of USD344bn in 2021, driven by economic slowdown and geopolitical tensions. Despite Beijing's efforts to attract foreign investment, new foreign direct investment in the first half of the year was the lowest since 2020. Meanwhile, Chinese outbound investment surged, hitting a record USD71bn in the second quarter, largely in electric vehicle and battery projects.