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FDI rises to US$5.89b

FOREIGN direct investment in China rose for the seventh straight month in February, up 1.08 percent year on year to US$5.89 billion, China's Ministry of Commerce said today.

The central government approved the establishment of 1,297 overseas-funded companies last month, increasing 2.53 percent from a year earlier.

The expansion of February FDI volume slowed from the gain of 7.79 percent in January.

"It is normal for foreign investment figures to have big fluctuations," said Li Maoyu, an analyst at the Changjiang Securities Co. "But the government should notice growing concerns by foreign investors."

Besides reflecting a broad climate for foreign investment, the FDI (together with trade figures) is a tool used by many analysts to measure the flow of speculative funds.

Many uncertainties lie ahead this year after China's foreign investment growth walked out of the shadow cast by the global financial crisis. One obstacle is the escalating trade disputes between China and other countries, Li said.

"China is targeted in many anti-dumping and anti-subsidy cases, and may face rocketing additional tariffs. If foreign investors plan to open factories in China and produce goods which will be sold overseas, they will have to take this risk into consideration," Li said.

China was involved in 116 trade investigations last year, the value of which reached an unprecedented US$1.2 billion.


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