Foreign investment falls amid turmoil in the West
By Wang Yanlin |
December 16, 2011, Friday
|
Print Edition
Print Edition
Foreign direct investment in China has fallen for the first time in 28 months, mainly due to economic problems in Europe and the United States.
A total of US$8.75 billion came from foreign investors last month, a reduction of 9.76 percent compared to the same period of last year, the Ministry of Commerce said yesterday.
The fall followed increases of 8.8 percent in October and 7.8 percent in September.
Although the total figure in a single month is easily affected by the progress of certain projects, it was noticeable there was less investment from Western countries.
"Declining investment from the United States and Europe is mainly responsible for the cut of foreign investment last month," said Shen Danyang, a ministry spokesman. "The drop is closely related to feeble economic conditions in the West. Also, the US is promoting its re-industrialization strategy, which creates some pressure for China to attract American investment in some high-value-added manufacturing sectors."
In the first 11 months, investment from the US slumped 23 percent year on year to US$2.7 billion, further deteriorating from a drop of 18 percent between January and October. Capital from the 27-member European Union only edged up 0.29 percent, the ministry's data showed.
In comparison, investment from emerging markets continued to grow strongly. Ten major Asian markets, including Japan, the Philippines, Thailand and Malaysia, jumped 17.9 percent annually in the first 11 months. "With risks of a worsening global economic climate next year, China should further diversify sources of foreign investment," Xue Jun, an analyst at CITIC Securities Co, said.
Shen said that despite the drop in November, China's FDI had seen rapid growth this year, and China remained an attractive destination for foreign investment in the long term.
Between January and November, foreign direct investment in China expanded 13.1 percent annually to US$103.7 billion. Of that, US$48.7 billion was pumped into China's services industry - the first time it surpassed investment in manufacturing, which was US$47.3 billion.
Meanwhile, China's outbound non-financial foreign direct investment advanced 5.2 percent year on year to US$50 billion in the first 11 months. It was also a sharp moderation from the growth of 14.1 percent to the end of October. China's investment in the EU rose 1.3 percent from a year earlier to US$1.9 billion.
"Chinese investors are more cautious in their investment decisions," Xue said. "Foreign countries should offer good investment opportunities, not those China does not need."
China has urged foreign countries to treat Chinese investors more fairly. At last month's Asia-Pacific Economic Cooperation summit, President Hu Jintao said he expected the US to relax high-tech export controls to China, and to provide convenience for Chinese companies wanting to invest in the US.
A total of US$8.75 billion came from foreign investors last month, a reduction of 9.76 percent compared to the same period of last year, the Ministry of Commerce said yesterday.
The fall followed increases of 8.8 percent in October and 7.8 percent in September.
Although the total figure in a single month is easily affected by the progress of certain projects, it was noticeable there was less investment from Western countries.
"Declining investment from the United States and Europe is mainly responsible for the cut of foreign investment last month," said Shen Danyang, a ministry spokesman. "The drop is closely related to feeble economic conditions in the West. Also, the US is promoting its re-industrialization strategy, which creates some pressure for China to attract American investment in some high-value-added manufacturing sectors."
In the first 11 months, investment from the US slumped 23 percent year on year to US$2.7 billion, further deteriorating from a drop of 18 percent between January and October. Capital from the 27-member European Union only edged up 0.29 percent, the ministry's data showed.
In comparison, investment from emerging markets continued to grow strongly. Ten major Asian markets, including Japan, the Philippines, Thailand and Malaysia, jumped 17.9 percent annually in the first 11 months. "With risks of a worsening global economic climate next year, China should further diversify sources of foreign investment," Xue Jun, an analyst at CITIC Securities Co, said.
Shen said that despite the drop in November, China's FDI had seen rapid growth this year, and China remained an attractive destination for foreign investment in the long term.
Between January and November, foreign direct investment in China expanded 13.1 percent annually to US$103.7 billion. Of that, US$48.7 billion was pumped into China's services industry - the first time it surpassed investment in manufacturing, which was US$47.3 billion.
Meanwhile, China's outbound non-financial foreign direct investment advanced 5.2 percent year on year to US$50 billion in the first 11 months. It was also a sharp moderation from the growth of 14.1 percent to the end of October. China's investment in the EU rose 1.3 percent from a year earlier to US$1.9 billion.
"Chinese investors are more cautious in their investment decisions," Xue said. "Foreign countries should offer good investment opportunities, not those China does not need."
China has urged foreign countries to treat Chinese investors more fairly. At last month's Asia-Pacific Economic Cooperation summit, President Hu Jintao said he expected the US to relax high-tech export controls to China, and to provide convenience for Chinese companies wanting to invest in the US.
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