SHANGHAI, Nov 6 Reuters China recorded its firstever quarterly deficit in foreign direct investment FDI, according to balance of payments data, underscoring Beijing39;s challenge in wooing overseas companies in the wake of a derisking move by Western governments.

Direct investment liabilities a measure of FDI were a deficit of 11.8 billion during the JulySeptember period, according to preliminary data of China39;s balance of payments released late on Friday.

That39;s the first quarterly shortfall since China39;s foreign exchange regulator began compiling the data in 1998, which could be linked to the impact of derisking by Western countries from China amid growing geopolitical tensions.

Some of the weakness in China39;s inward FDI may be due to multinational companies repatriating earnings, Goldman Sachs wrote, adding China39;s interest rate differentials with developed countries also played a part.

With interest rates in China 39;lower for longer39; while interest rates outside of China 39;higher for longer39;, capital outflow pressures are likely to persist.

As a result, China39;s basic balance which encompasses current account and direct investment balances and are more stable than volatile portfolio investments recorded a deficit of 3.2 billion, the second quarterly shortfall on record.

Given these unfolding dynamics, which are poised to exert pressure on the RMB, we anticipate a sustained strategic response from China39;s authorities, Tommy Xie, head of…