FDI drops, but no cause for concern
Print Edition
CHINA’S foreign direct investment dropped in May, but the Ministry of Commerce said that was mainly due to last year’s high comparative base.
Foreign direct investment, which excludes funds in the financial sector, contracted 6.7 percent last month from a year earlier to US$8.6 billion, the ministry said yesterday, compared with the rise of 3.4 percent in April.
In the first five months, China attracted US$48.9 billion in foreign direct investment, up 2.8 percent on an annual basis.
Investors from South Korea and the United Kingdom turned out to be the driving force of investment growth, with their capital input surging 87.9 percent and 62.2 percent respectively in the January-May period.
Funds from Japan decreased 42.2 percent during the period and that from the 28-member European Union was down 22.1 percent. Countries of the Association of Southeast Asian Nations cut their direct investment in China by 22.3 percent and funds from the United States also lost 9.3 percent.
Ministry spokesman Shen Danyang said China remained one of the best destinations for foreign investment due to its stable political conditions, massive consumer market, growing number of industries opening up to foreign capital, and better business environment.
The drop of investment from economies such as the EU, the US and some ASEAN members was a result of base effects as certain major projects happened to take place last year, Shen said.
“The decline of foreign investment did not represent any trend,” Shen said, noting China has space for further improvement but it was wrong to say its business environment had been deteriorating.
A recent report by the European Union Chamber of Commerce in China said some European companies were expressing less confidence in China due to fiercer competition and higher labor costs.
Continuous efforts
Shen said: “All the hindrances mentioned in the report are not new, and China’s government has made continuous efforts to address them. It is fair to say China’s business climate is improving, not the vice versa.”
As a sign of China’s growing efforts to restructure the economy, foreign investment flowing into the service sector gained 19.5 percent to US$27.5 billion in the first five months, making up 56.2 percent of the overall basket. In comparison, the manufacturing sector drew US$17.4 billion, down 16.5 percent on an annual basis to account for 35.6 percent of the basket.
China’s outbound direct investment fell 10.2 percent to US$30.8 billion in the first five months. The decrease was also due to the high comparative base last year, the ministry said, with China completing several major projects.
Outbound investment to the US rose 144 percent to US$2.03 billion in the first five months, and that toward Russia and Japan also more than doubled. But funds flowing into Hong Kong, the EU and Australia contracted 32.6 percent, 9.2 percent and 3.2 percent respectively, dragging down the overall growth rate.
By the end of May, China’s outbound direct investment totalled US$556.5 billion.
- 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.
