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Foreign direct investment into China grows amid stabilizing economies

By Wang Yanlin | July 15, 2014, Tuesday | Online Edition

CHINA'S foreign direct investment returned to growth in June as the economy stabilized  both at home and abroad, the Ministry of Commerce said today.

It predicted the attraction of foreign investment would enter an era of slower growth but better quality.

Foreign investors channeled US$14.4 billion of funds into China last month, up 0.2 percent from a year earlier. In May, the figure had contracted by 6.7 percent, the official data showed.

In the first half of 2014, China's FDI expanded 2.2 percent to US$63.3 billion, with 10,972 new foreign ventures being established on the Chinese mainland.

Shen Danyang, a spokesman at Ministry of Commerce, said China's FDI growth has entered a phase of slower expansion due to slow economic growth in developed markets and China's own economic restructuring efforts.

"But the proportion of China's foreign investment has been on the rise steadily in the global basket...it was around 8 percent in 2013, doubling that in 2007 and indicating the sustained charm of China for foreign investors even if the overall environment is not good," Shen said.

Shen said foreign investment may continue the slow but stable growth pattern in the future, and investors looking for a massive market, especially those in the service sector, will be a major force to drive that growth.

As a sign of China's growing efforts to restructure the economy, foreign investment flowing into China's service sector gained 14.8 percent to US$35.2 billion in the first six months, accounting for 56 percent of the overall basket. In comparison, the manufacturing sector drew US$22.8 billion, down 13.9 percent on an annual basis to account for 36 percent of the basket.

Meanwhile, China's outbound direct investment fell 5 percent to US$43.3 billion in the first half.

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