2010 FDI figure tops US$100b
By Wang Yanlin |
January 19, 2011, Wednesday
|
Print Edition
Print Edition
FOREIGN direct investment in China surged to a record high last year - breaking the US$100 billion barrier for the first time.
There was a sudden increase in December, which may have been bolstered by an inflow of more speculative money into the economy.
China wrapped up foreign direct investment of US$105.7 billion in 2010, up 17.4 percent from a year earlier, the Ministry of Commerce said yesterday.
"The best ever performance of China in attracting foreign investment is based on China's good economic performance," said Li Maoyu, an analyst at the Changjiang Securities Co. "But we can hardly say that all of the investment will be good for China's economy," Li added.
In December alone, the amount of foreign investment pointed to US$14 billion - a sudden climb from November's US$9.7 billion. November's figure itself was huge, up 38.17 percent from a year earlier.
"The acceleration in recent months is really unexpected," said Chen Wei, an analyst at China Minzu Securities Co. "We cannot rule out the possibility that some part of the investment is coming from speculators betting China will further raise interest rates and make the yuan stronger."
Chen said foreign investment used to be flat at year end, as it is not a popular time for investors to make big decisions.
China has lifted its interest rates twice in the past four months to tame inflation and curb asset bubbles.
But with the Consumer Price Index, the main gauge of inflation, reaching a 28-month high in November, another interest rate rise is widely expected.
The yuan appreciated 4.75 percent against the US dollar in 2010, and some economists estimate it will further appreciate by 5 to 6 percent this year.
A World Bank report released last week warned that excessive capital flowing into emerging markets may hamper the world's economic expansion in the long run.
It said heavy inflows to certain big middle-income economies may carry risks and threaten medium-term recovery, especially if currency values rise suddenly or if asset bubbles emerge.
Net international equity flows into developing countries rose by an annualized 42 percent last year, with nine countries - including China - receiving the bulk of this increase, according to the report.
With the US starting another round of monetary policy easing, analysts said the upsurge of foreign investment in China is unlikely to halt in the coming months, and such a trend may make it harder for policy-makers to raise interest rates.
The People's Bank of China announced last Friday that it will increase the reserve requirement ratio to tame inflation, instead of increasing interest rate rise.
Ministry spokesman Yao Jian reinforced yesterday that the government will make intensive efforts to stop speculative funds flowing into sensitive industries.
There was a sudden increase in December, which may have been bolstered by an inflow of more speculative money into the economy.
China wrapped up foreign direct investment of US$105.7 billion in 2010, up 17.4 percent from a year earlier, the Ministry of Commerce said yesterday.
"The best ever performance of China in attracting foreign investment is based on China's good economic performance," said Li Maoyu, an analyst at the Changjiang Securities Co. "But we can hardly say that all of the investment will be good for China's economy," Li added.
In December alone, the amount of foreign investment pointed to US$14 billion - a sudden climb from November's US$9.7 billion. November's figure itself was huge, up 38.17 percent from a year earlier.
"The acceleration in recent months is really unexpected," said Chen Wei, an analyst at China Minzu Securities Co. "We cannot rule out the possibility that some part of the investment is coming from speculators betting China will further raise interest rates and make the yuan stronger."
Chen said foreign investment used to be flat at year end, as it is not a popular time for investors to make big decisions.
China has lifted its interest rates twice in the past four months to tame inflation and curb asset bubbles.
But with the Consumer Price Index, the main gauge of inflation, reaching a 28-month high in November, another interest rate rise is widely expected.
The yuan appreciated 4.75 percent against the US dollar in 2010, and some economists estimate it will further appreciate by 5 to 6 percent this year.
A World Bank report released last week warned that excessive capital flowing into emerging markets may hamper the world's economic expansion in the long run.
It said heavy inflows to certain big middle-income economies may carry risks and threaten medium-term recovery, especially if currency values rise suddenly or if asset bubbles emerge.
Net international equity flows into developing countries rose by an annualized 42 percent last year, with nine countries - including China - receiving the bulk of this increase, according to the report.
With the US starting another round of monetary policy easing, analysts said the upsurge of foreign investment in China is unlikely to halt in the coming months, and such a trend may make it harder for policy-makers to raise interest rates.
The People's Bank of China announced last Friday that it will increase the reserve requirement ratio to tame inflation, instead of increasing interest rate rise.
Ministry spokesman Yao Jian reinforced yesterday that the government will make intensive efforts to stop speculative funds flowing into sensitive industries.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
