China remained Pakistan’s largest source of foreign direct investment (FDI) during the first half of the current fiscal year, Gwadar Pro reported on Tuesday quoting data released by the State Bank of Pakistan (SBP). Net FDI from China reached $422.9 million during July–December FY2026, accounting for more than half of Pakistan’s total net FDI of $808.1 million for the six-month period.

Gross inflows from China stood at $583.4 million, while outflows totaled $160.5 million, leaving Beijing significantly ahead of all other partner countries. Overall, Pakistan received $1.81 billion in FDI gross inflows from all partners during the period, against outflows of $1.01 billion. The resulting net FDI of $808.1 million represents a 43.2% decline compared to the $1.42 billion recorded during the same period in FY2025.

The country also recorded substantial negative portfolio investment flows of $600.6 million. When combined with FDI, the total foreign investment for the period stood at $207.4 million. The monthly performance for December was particularly strained; while China invested a net $114.1 million, massive outflows in other sectors pushed Pakistan’s overall monthly net FDI into negative territory at -$134.7 million. This was a sharp reversal from the $182.4 million in net inflows recorded in December 2024.

Hong Kong SAR, a major vehicle for Chinese outbound investment, emerged as a notable contributor with a net investment of $163.8 million during July–December FY2026. Other significant investors included the United Arab Emirates ($112.2 million) and Switzerland ($106.8 million). In contrast, net inflows from the United Kingdom and the United States remained modest, while several advanced economies recorded net outflows.

By sector, "electricity, gas, steam and air conditioning supply" and "financial and insurance activities" attracted the largest shares of investment, reflecting a continued concentration of capital in Pakistan’s energy and services sectors.

Credit: Independent News Pakistan (INP) — Pak-China