Non-financial Chinese foreign direct investment in the first 10 months of 2017 is reported to fall by 40.9%, showing the government policy has worked. The EIU report shows Singapore has replaced the US as the top destination for the Chinese foreign direct investment. Recent years, the Chinese overseas investment has increased relatively, especially the investment in “the Silk Road Economic Belt and the 21st-Century Maritime Silk Road" has increased.
Receiving foreign direct investment is critical for developing countries and emerging markets, as they need foreign investors' funding to boost their domestic economic outputs. The Chinese government's action to lower its foreign direct investment still puts itself in the position of a developing country. The increase in the foreign investment means hot money flows out. When hot money flows out, it can help to depreciate the currency value. In addition, the investment can bring back the profits generated overseas to China, this is another benefits of foreign direct investment, as some Chinese people (businessmen and investors) could gain additional opportunities and profits.
However, on the other hand, I think that the Chinese government lowers the foreign direct investment for political reasons. When the foreign direct investment increases rapidly, it means there are many people having their mutual benefits with other governments, those who benefit from foreign direct investment are more likely to be influential. This means the increase in the foreign direct investment could mean an increasing loss in sovereignty
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