Foreign investment rises as confidence returns
By Wang Yanlin |
March 20, 2013, Wednesday
|
Print Edition
Print Edition
Foreign direct investment in China rose for the first time in nine months in February after the world and its second-largest economy showed signs of stabilization, the Ministry of Commerce said yesterday.
Foreign investors channeled US$8.21 billion into China last month, up 6.32 percent from a year earlier. That was in contrast to January's fall of 7.3 percent, the eighth consecutive monthly decline.
Ministry spokesman Shen Danyang attributed last month's rebound to economic recovery at home and abroad. But it was too early to conclude that February was a turning point for China's inbound foreign investment, he said.
"We have experienced quite a lot of fluctuations, or to put it straight, downfalls. But we remain the world's best performer in attracting foreign investment when global investors tightened their budgets," Shen said.
"It is expected that China's inbound foreign investment will stabilize this year, with investors' acknowledgement of China's economic competitiveness and its growth outlook," he added.
China's economy showed further signs of stabilization in the first two months, as both industrial production and fixed-asset investment expanded at a solid pace while export performance far exceeded expectation.
Inflation concerns
Some analysts say China's growth may accelerate to around 8.2 percent in the first three months, up from 7.9 percent in the fourth quarter of last year.
Worries about growth have been replaced by inflation concerns, with the Consumer Price Index settling at a 10-month high of 3.2 percent in February.
Chang Jian, a Barclays economist, said it was unlikely China would further ease its policies, and the central bank may be biased towards tightening liquidity through open market operations if credit expands too quickly or inflation risks increase.
Foreign capital flowing into China's service sector expanded 5.49 percent to US$8.45 billion during January and February period, making up 48.32 percent of the total. The manufacturing sector took US$7.47 billion, down 10.6 percent on an annual basis.
Investment from the 27-member European Union jumped 34 percent in the first two months to US$1.2 billion, while United States investors reduced their stake in China by 5.3 percent to US$497 million.
China's outbound direct investment surged 147.3 percent in the first two months to US$18.4 billion, indicating investors' enthusiasm to globalize businesses.
Foreign investors channeled US$8.21 billion into China last month, up 6.32 percent from a year earlier. That was in contrast to January's fall of 7.3 percent, the eighth consecutive monthly decline.
Ministry spokesman Shen Danyang attributed last month's rebound to economic recovery at home and abroad. But it was too early to conclude that February was a turning point for China's inbound foreign investment, he said.
"We have experienced quite a lot of fluctuations, or to put it straight, downfalls. But we remain the world's best performer in attracting foreign investment when global investors tightened their budgets," Shen said.
"It is expected that China's inbound foreign investment will stabilize this year, with investors' acknowledgement of China's economic competitiveness and its growth outlook," he added.
China's economy showed further signs of stabilization in the first two months, as both industrial production and fixed-asset investment expanded at a solid pace while export performance far exceeded expectation.
Inflation concerns
Some analysts say China's growth may accelerate to around 8.2 percent in the first three months, up from 7.9 percent in the fourth quarter of last year.
Worries about growth have been replaced by inflation concerns, with the Consumer Price Index settling at a 10-month high of 3.2 percent in February.
Chang Jian, a Barclays economist, said it was unlikely China would further ease its policies, and the central bank may be biased towards tightening liquidity through open market operations if credit expands too quickly or inflation risks increase.
Foreign capital flowing into China's service sector expanded 5.49 percent to US$8.45 billion during January and February period, making up 48.32 percent of the total. The manufacturing sector took US$7.47 billion, down 10.6 percent on an annual basis.
Investment from the 27-member European Union jumped 34 percent in the first two months to US$1.2 billion, while United States investors reduced their stake in China by 5.3 percent to US$497 million.
China's outbound direct investment surged 147.3 percent in the first two months to US$18.4 billion, indicating investors' enthusiasm to globalize businesses.
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