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June 14, 2019

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China bucks trend, sees steady FDI growth

China saw steady foreign direct investment growth in May and its non-financial outbound direct investment maintained healthy growth in the first five months of this year, official data showed yesterday.

FDI reached 63.83 billion yuan (US$9.47 billion) last month, rising 8.5 percent year on year, according to the Ministry of Commerce.

Total foreign investment actually utilized in the past five months stood at 369.06 billion yuan, up 6.8 percent year on year, data showed.

Non-financial ODI in 3,115 companies from 149 countries and regions amounted to 301.15 billion yuan from January to May, down 1 percent year on year, the ministry said.

During the period, Chinese companies made an investment of US$5.63 billion in 51 countries along the Belt and Road, accounting for 12.6 percent of the total.

The structure of outbound investment continued to improve, with investment mainly going into sectors including leasing and business services, manufacturing and retail as well as information and technology.

Major overseas projects, bringing mutual benefit, promoted growth in local areas. Newly signed overseas projects with contract value of over US$50 million came in at 287 in the first five months, it said.

Despite global foreign direct investment flows sliding by 13 percent in 2018 from the year before, China bucked the trend, posting a record US$139 billion of FDI, a United Nations report said on Wednesday.

The United Nations Conference on Trade and Development’s World Investment Report 2019 said that FDI to East Asia rose by 4 percent to US$280 billion in 2018, with inflows to China increasing by 4 percent to an all-time high.

The US$139 billion into China accounted for more than 10 percent of the world’s total US$1.3 trillion FDI, said UNCTAD.

“Liberalizing efforts helped drive FDI flows to a high level and last year it was a record level again, the highest in history,” said James Zhan, director of UNCTAD’s division on investment and enterprise, at a press conference.

He said that China has put in place liberalization measures that included a new investment law and improved the investment climate so that the list of restrictive investment areas was reduced.

According to the report, foreign investors established more than 60,000 new companies in China in 2018.

Zhan explained that China itself is a large market. “That is why foreign countries are still producing in China.”

“There are a number of steps that China has taken that have been positive in opening up its markets for greater FDI and foreign investment,” said UNCTAD Secretary-General Mukhisa Kituyi on the same occasion.

Kituyi noted the national treatment accorded to foreign investors by the newly adopted investment law in China, the China International Import Expo in Shanghai last November and the most recent Belt and Road summit, saying “all are positive market signals that encourage more foreign investment.”


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