According to a ranking by the Financial Times and Nikkei, California’s largest cities, including Los Angeles and San Francisco, have become less attractive to foreign investors. Factors such as an uncertain global economic outlook, high taxes, and Chinese restrictions on outbound deals have led to a decrease in capital flows into the state. Los Angeles fell 10 places in the ranking and attracted the lowest number of foreign investment projects in five years. While some notable deals were made, they failed to stimulate investment in the larger cities. California as a whole saw a recovery in foreign direct investment inflows in 2022, with most investment coming from Japan, the UK, France, Canada, and Germany. However, no major Californian city ranked among the top 20 US hubs for attracting foreign businesses. The Chinese government’s policies limiting capital outflows have also impacted investment in the state. Chinese-owned enterprises in California have declined by 14% since 2021. This decline in Chinese investment has made the state more reliant on Japanese investment, especially as it prepares for major events like the 2028 summer Olympics.
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