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China posts 19.8% increase of FDI last month
By Wang Yanlin |
August 16, 2011, Tuesday
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Online Edition
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FOREIGN direct investment in China picked up in July, increasing by 19.83 percent from a year earlier to US$8.29 billion, the Ministry of Commerce said today.
The pace compared with 2.83 percent in June, but the actual value of foreign investment last month was less than June's US$12.8 billion.
"The contradiction is mainly due to different bases," said Xu Weihong, an analyst at the Guodu Securities Co. "On the whole, foreign investors still showed a strong interest in China because of its growth potential and weak markets elsewhere."
June's foreign investment was the highest this year in terms of value. However, there were signs that American and European businesses have cut their investments in China, said Yao Jian, the ministry spokesman, but he did not provide a breakdown of the data today.
In the first six months, US investors channeled US$1.67 billion into China, down 22.32 percent from a year earlier. Investors from the EU countries poured US$3.46 billion into China in the same period, up 1.17 percent year on year.
"The trend of less investment from the US and Europe is likely to continue because of their poor economic performance," said Li Maoyu, an analyst at the Changjiang Securities Co. "However, if the US extends its policy of quantitative easing, China may witness a new wave of speculative money."
Li said the current growth of foreign investment remained stable, judging from May's pace of 13.4 percent and April's 15.2 percent.
The US Federal Reserve has pledged to keep its key interest rate at a record low for two more years in the wake of an unprecedented cut of its credit rating by the Standard & Poor. The weak economic outlook in the US may divert more global funds to China while Europe is still mired in its debt crisis.
E B Rajesh, chief representative of the Confederation of Indian Industry, said China is still the top candidate for foreign investors.
"Although labor costs are rising rapidly, China has such a big pool of skilled workers that you can't find anywhere else," Rajesh said.
In the first seven months, foreign investors pumped US$69.18 billion into China, up 18.57 percent from a year earlier.
Foreign direct investment in China may exceed US$100 billion again this year, said Assistant Minister of Commerce Yu Jianhua last month, citing China's solid growth momentum that assures investors of a better return.
The pace compared with 2.83 percent in June, but the actual value of foreign investment last month was less than June's US$12.8 billion.
"The contradiction is mainly due to different bases," said Xu Weihong, an analyst at the Guodu Securities Co. "On the whole, foreign investors still showed a strong interest in China because of its growth potential and weak markets elsewhere."
June's foreign investment was the highest this year in terms of value. However, there were signs that American and European businesses have cut their investments in China, said Yao Jian, the ministry spokesman, but he did not provide a breakdown of the data today.
In the first six months, US investors channeled US$1.67 billion into China, down 22.32 percent from a year earlier. Investors from the EU countries poured US$3.46 billion into China in the same period, up 1.17 percent year on year.
"The trend of less investment from the US and Europe is likely to continue because of their poor economic performance," said Li Maoyu, an analyst at the Changjiang Securities Co. "However, if the US extends its policy of quantitative easing, China may witness a new wave of speculative money."
Li said the current growth of foreign investment remained stable, judging from May's pace of 13.4 percent and April's 15.2 percent.
The US Federal Reserve has pledged to keep its key interest rate at a record low for two more years in the wake of an unprecedented cut of its credit rating by the Standard & Poor. The weak economic outlook in the US may divert more global funds to China while Europe is still mired in its debt crisis.
E B Rajesh, chief representative of the Confederation of Indian Industry, said China is still the top candidate for foreign investors.
"Although labor costs are rising rapidly, China has such a big pool of skilled workers that you can't find anywhere else," Rajesh said.
In the first seven months, foreign investors pumped US$69.18 billion into China, up 18.57 percent from a year earlier.
Foreign direct investment in China may exceed US$100 billion again this year, said Assistant Minister of Commerce Yu Jianhua last month, citing China's solid growth momentum that assures investors of a better return.
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