Seasonal factors behind slow FDI growth
Print Edition
CHINA’S foreign direct investment growth lost momentum in February but mainly due to seasonal factors, the Ministry of Commerce said yesterday.
Foreign investors channeled US$8.56 billion into the country last month, up 0.9 percent from a year earlier. The growth pace moderated sharply from the surge of 29.4 percent in January, which was the strongest in nearly four years.
Shen Danyang, a ministry spokesman, said the different timing of the Chinese New Year, which started in February this year but in January last year, distorted many activity data, including the foreign investment. “China remains an attractive place for foreign investors due to its massive market potential, good infrastructure construction and the continuous improvement of business environment,” Shen said.
In the first two months, foreign investment grew 17 percent to US$22.5 billion. It was led by funds in services, which surged 30 percent year on year to US$13.7 billion and represented 61 percent of the total. Investment in manufacturing rose 7.1 percent to US$7.5 billion, or a third of the basket.
Saudi Arabia investors raised their funds in China by more than eight times from a year earlier in January and February combined, as the country expanded some oil and chemicals projects in Fujian Province and Tianjin, the ministry said.
Investment from France also increased by more than three times with chemical firm Arkema injecting capital into a major project. Investment from Germany and the United States rose 59 percent and 31 percent respectively, while countries of the Association of Southeast Asian Nations reporting a decrease in their investment in China by 30.7 percent during the January-February period.
Seasonal factors and the influence of some major projects were held accountable for the sharp fluctuations, Shen said.
China released a broader foreign investment guideline last week. Shen said the new guideline, which will take effect on April 11, will give a boost to attract foreign investment while making it better serve China’s new economic conditions.
In 2014, China absorbed a total of US$119.6 billion non-financial foreign investment, up 1.7 percent year on year. It helped China surpass the United States to become the world’s top destination for foreign investment.
Meanwhile, China’s outbound direct investment increased 68.2 percent to US$7.25 billion in February, picking up from the pace of 40.6 percent in January with major currencies, except the US dollar, continuing to slide.
In the first two months, China’s outbound direct investment added 51 percent to US$17.4 billion, with funds flowing into 1,684 overseas companies in 136 countries and regions.
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