Closer relations spark surge in foreign investment
Print Edition
CHINA’S foreign direct investment grew at its fastest pace in 15 months in November after closer relationships with other countries developed during an APEC meeting in October, the Ministry of Commerce said yesterday.
Foreign investors channeled US$10.36 billion into the country last month, up 22.2 percent from a year earlier, official figures showed — a rapid gain in pace compared with October’s 1.3 percent growth and 1.9 percent in September.
Thanks to the sharp upturn, foreign investment in the first 11 months shifted to a positive growth of 0.7 percent, reversing the contraction of 1.2 percent during the January-October period.
Shen Danyang, a ministry spokesman, said plans to revive the ancient Silk Road and construct a maritime Silk Road, highlighted at the APEC meeting, would create new growth opportunities.
During the meeting in Beijing, China sealed landmark free trade agreements with Australia and South Korea.
The ministry said investment from South Korea jumped 22.9 percent in the first 11 months. In contrast, Japan reduced investment by 39.7 percent, while the United States and the European Union saw their input fall 22.2 percent and 9.8 percent respectively.
Xue Jun, an analyst with CITIC Securities Co, said foreign direct investment may become more diversified with China’s economic restructuring and its blueprint of exploring business opportunities with new partners.
“We may see faster growth of bilateral trade and investment with countries along the Silk Road, which have great potential for further expansion,” Xue said. “Also, more investment may flow into emerging industries under China’s push of economic restructuring.”
As a sign of China’s efforts to upgrade its economic structure, foreign investment in services rose 7.9 percent year on year to US$58.5 billion in the first 11 months, representing 55.1 percent of the total. In comparison, investment in manufacturing fell 13.3 percent to US$35.9 billion, or 33.8 percent of the total.
But Xue said November’s rise in FDI may not be sustainable because the economic fundamentals in China remained weak. “Good business prospect remains the key to attract foreign investment,” Xue said.
China’s outbound direct investment, meanwhile, was down 26.1 percent year on year to US$7.92 billion in November, largely due to a high comparative base, the ministry said.
In the January-November period, outbound investment still increased 11.9 percent to US$89.8 billion, with funds channeled into the EU jumping 195 percent and those into Japan up 80 percent. Under the influence of a high comparative base, China’s input in Russia fell 76 percent.
Zhang Xiangchen, an assistant commerce minister, said earlier that China has maintained a stable and fast growth in outbound direct investment in recent years and, sooner or later, outbound investment would surpass the inbound foreign investment to make the country a net investor.
Outbound direct investment is expected to grow by at least 10 percent a year over the next five years, Zhang said.
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