China says has not seen large-scale exodus of foreign capital amid coronavirus

China has not seen a large-scale exodus of foreign capital even as the coronavirus pressures the business of companies with foreign investment, the commerce ministry said on Thursday.

Official data on Wednesday showed that foreign direct investment (FDI) into China plunged 10.8% in January-March from a year earlier, because of the coronavirus outbreak. No country can arbitrarily change the global supply chains, said ministry spokesman Gao Feng in response to media reports that Japan and the United States were supporting firms to relocate back to their countries.

"Currently, globalization has been met with undertow, but the overall trend will not change," said Gao, adding that many Japanese firms had expressed a willingness to boost investment in China. Beijing is trying to restart its economic engines after weeks of near paralysis to contain the epidemic that had severely restricted business activity, the flow of goods and the daily life of people.

But as the virus rapidly spread to almost all of China's trading partners, severely restraining overseas demand, particularly in European and U.S. markets, export orders have been scrapped. As global demand tumbles, Chinese exporters are pivoting some of their capacity to meet domestic demand, said Gao.

But they have run into difficulties as they grapple with different sales channels, refitting production lines and building a domestic brand, he said.