Why Is Foreign Direct Investment In China Declining?

I have seen a number of important issues that may underlay China's economy
imbalance are discussed in many blogs and forums, and it is suggested that current account
surpluses and FDI remain important contributors to the foreign exchange
reserve accumulation. Using empirical methodology analysis, the
relationships and interactions between FDI, REER and Gross Domestic
Product (GDP) in China in the long-run is shown, which yield additional
information about implications for the behaviors of REER and FDI in the
Chinese economy.

The Chinese government announced a series of measures
to stave off domestic impacts of the global financial crisis and boost the
confidence of foreign investors to help stabilize foreign investment growth. To counter the decline, the MOC said it would give
its provincial branches more say on approving overseas projects invested by
domestic enterprises. Yao said about 85 percent of these projects would be
subject to the approval of provincial commerce authorities instead of the MOC.

Hope this helps...