Speculation fears after surge in foreign money
By Wang Yanlin |
December 16, 2010, Thursday
|
Print Edition
Print Edition
FOREIGN direct investment in China accelerated sharply last month, possibly boosted by an inflow of more speculative money, analysts said.
November's foreign investment climbed 38.17 percent from a year earlier to US$9.7 billion, the Ministry of Commerce said yesterday.
That compared with an increase of 7.86 percent in October, 6.14 percent in September and 1.38 percent in August. However in June and July, investment growth was at a similarly high level - 39.6 percent and 29.1 percent respectively.
Foreign investment has been expanding for 16 months in a row.
In the first 11 months, it expanded 17.73 percent annually to US$91.7 billion, of which US$20.1 billion was invested in the property market, a surge of 48 percent from a year earlier, according to the ministry said.
"The acceleration in November is unexpected and very unusual," said Chen Wei, an analyst at China Minzu Securities Co.
"The growth of foreign investment used to be flat at year end, because it is not a regular time for investors to make big decisions," Chen said.
And the base of US$7 billion in November 2009 was not low with foreign investment coming in the middle of a rapid recovery from the global financial crisis.
"One explanation could be that more speculative funds are sneaking into the country, betting on a stronger yuan and more interest rate increases," Chen said.
The United States last month announced it would carry out another round of monetary policy easing, which could push liquidity into emerging markets for quicker returns.
Also, many developed countries kept their interest rates at near zero to stimulate their economies, making it hard for emerging markets to raise interest rates for fear of more liquidity coming in.
China's central bank lifted the reserve requirement ratio again last Friday to curb inflation, instead of an interest rate rise.
The People's Bank of China has increased the reserve requirement for six times this year, and the latest was the third in five weeks.
Ministry spokesman Yao Jian said the government will make intensive efforts to track speculative money and stop it flowing into sensitive industries such as property and the financial markets.
November's foreign investment climbed 38.17 percent from a year earlier to US$9.7 billion, the Ministry of Commerce said yesterday.
That compared with an increase of 7.86 percent in October, 6.14 percent in September and 1.38 percent in August. However in June and July, investment growth was at a similarly high level - 39.6 percent and 29.1 percent respectively.
Foreign investment has been expanding for 16 months in a row.
In the first 11 months, it expanded 17.73 percent annually to US$91.7 billion, of which US$20.1 billion was invested in the property market, a surge of 48 percent from a year earlier, according to the ministry said.
"The acceleration in November is unexpected and very unusual," said Chen Wei, an analyst at China Minzu Securities Co.
"The growth of foreign investment used to be flat at year end, because it is not a regular time for investors to make big decisions," Chen said.
And the base of US$7 billion in November 2009 was not low with foreign investment coming in the middle of a rapid recovery from the global financial crisis.
"One explanation could be that more speculative funds are sneaking into the country, betting on a stronger yuan and more interest rate increases," Chen said.
The United States last month announced it would carry out another round of monetary policy easing, which could push liquidity into emerging markets for quicker returns.
Also, many developed countries kept their interest rates at near zero to stimulate their economies, making it hard for emerging markets to raise interest rates for fear of more liquidity coming in.
China's central bank lifted the reserve requirement ratio again last Friday to curb inflation, instead of an interest rate rise.
The People's Bank of China has increased the reserve requirement for six times this year, and the latest was the third in five weeks.
Ministry spokesman Yao Jian said the government will make intensive efforts to track speculative money and stop it flowing into sensitive industries such as property and the financial markets.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
