Foreign investment still falling
By Ye Zhen |
February 21, 2013, Thursday
|
Print Edition
Print Edition
FOREIGN direct investment in China fell at a faster pace in January, the Ministry of Commerce said yesterday.
Inbound investment, excluding funds flowing into financial sectors, dropped 7.3 percent year on year to US$9.27 billion. December saw a fall of 4.5 percent.
It was the eighth month of decline and the deepest since July's plunge of 8.7 percent.
Ministry spokesman Shen Danyang admitted the drop was "not small" but said there were positive signs as the number of foreign companies newly established in China increased by 34.3 percent to 1,883 last month.
Shen said he didn't expect a sharp fall in foreign direct investment this year and it would "remain at a stable level as transnational investment is still in a downturn amid global uncertainties."
Dariusz Kowalczyk, senior economist at Credit Agricole CIB in Hong Kong, said the January fall "likely reflects weaker perception of China's growth among foreign businesses after the economy slowed to a 13-year low last year and as its growth potential has been lowered by weaker outlook for main export markets."
Kowalczyk added: "We expect that later in the year FDI will rebound modestly, as global business confidence improves and on delayed impact of the Chinese growth recovery toward the end of 2012."
Last month, the ministry announced that foreign direct investment posted its first annual fall in three years to US$111.7 billion in 2012, compared to 2011's record high of US$116 billion.
China's manufacturing sector absorbed US$4.43 billion in foreign direct investment in January, representing an annual decline of 5.8 percent.
Funds flowing into the service sector fell 9.8 percent from a year earlier to US$4.03 billion, led by a 14 percent cut in foreign investments in the real estate market.
Money from the 27-member European Union surged 81.8 percent to US$820 million during the month. Capital from Japan fell 20 percent to US$640 million while US investment was down 20 percent to US$270 million.
China's non-financial outbound direct investment continued its upward trend in January, the ministry said, rising 12.3 percent to US$4.91 billion as domestic investors pumped money into 777 overseas companies.
Inbound investment, excluding funds flowing into financial sectors, dropped 7.3 percent year on year to US$9.27 billion. December saw a fall of 4.5 percent.
It was the eighth month of decline and the deepest since July's plunge of 8.7 percent.
Ministry spokesman Shen Danyang admitted the drop was "not small" but said there were positive signs as the number of foreign companies newly established in China increased by 34.3 percent to 1,883 last month.
Shen said he didn't expect a sharp fall in foreign direct investment this year and it would "remain at a stable level as transnational investment is still in a downturn amid global uncertainties."
Dariusz Kowalczyk, senior economist at Credit Agricole CIB in Hong Kong, said the January fall "likely reflects weaker perception of China's growth among foreign businesses after the economy slowed to a 13-year low last year and as its growth potential has been lowered by weaker outlook for main export markets."
Kowalczyk added: "We expect that later in the year FDI will rebound modestly, as global business confidence improves and on delayed impact of the Chinese growth recovery toward the end of 2012."
Last month, the ministry announced that foreign direct investment posted its first annual fall in three years to US$111.7 billion in 2012, compared to 2011's record high of US$116 billion.
China's manufacturing sector absorbed US$4.43 billion in foreign direct investment in January, representing an annual decline of 5.8 percent.
Funds flowing into the service sector fell 9.8 percent from a year earlier to US$4.03 billion, led by a 14 percent cut in foreign investments in the real estate market.
Money from the 27-member European Union surged 81.8 percent to US$820 million during the month. Capital from Japan fell 20 percent to US$640 million while US investment was down 20 percent to US$270 million.
China's non-financial outbound direct investment continued its upward trend in January, the ministry said, rising 12.3 percent to US$4.91 billion as domestic investors pumped money into 777 overseas companies.
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