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Optimism despite FDI drop

FOREIGN direct investment in China fell 6.8 percent from a year earlier to US$8.96 billion in June, the ninth straight monthly decline but softening a lot from the drop of 17.8 percent in May.

The tendency towards stabilization in FDI was encouraging but the data might remain in the red for some time as the global economy was still full of uncertainties, analysts said.

"The drop of FDI has improved a lot thanks to the restoration of confidence among foreign investors in the Chinese economy. However, it may take a long time for the data to return to positive while the global economy is still staggering," said Tang Yonggang, an analyst at Hongyuan Securities Co.

Li Maoyu, an analyst at Changjiang Securities Co, said the trend was in line with trade data which signaled that external demand has seen signs of recovery.

China's exports fell 21.4 percent year on year to US$95.4 percent in June, improving from the reductions of 26.4 percent in May and 22.6 percent in April.

China attracted a total of US$43 billion investment from overseas in the first half, down 17.9 percent from the same period last year, the Ministry of Commerce said today at a conference in Beijing.


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