FDI into China down 16.95% in July
August 18, 2014, 5:48 am

Officials rejected speculation the decline in FDI was related to China’s ongoing anti-monopoly investigations into foreign-funded companies [AP]

Chinese officials said analysts should not read too much into the FDI fall.

“With China speeding up economic restructuring, it’s normal for us to have some fluctuations in FDI figures,” said Shen Danyang, spokesman of the Ministry Of Commerce, “but such fluctuations are not evidence for changing trends.”

The spokesperson rejected speculation the decline in FDI was related to China’s ongoing anti-monopoly investigations into foreign-funded companies.

“Groundless speculation is completely unnecessary,” he said. Earlier this month, China sentenced a British corporate investigator and his American wife to 2-1/2 years in prison for illegally obtaining private records of Chinese citizens and selling the information on to clients including drugmaker GlaxoSmithKline Plc. The couple has accepted their indictment and will not appeal their sentence said their lawyers last week. GlaxoSmithKline (GSK) is itself the target of a separate corruption probe into allegations it paid massive bribes to doctors and officials in China to win sales.

Most foreign analysts have argued the trial has unsettled the foreign business community in China.

Monday’s data shows for the first seven months, FDI, which excludes investment in the financial sector, stood at $71.14 billion, down 0.35 per cent from the same period last year.

Foreign investors set up 13,249 new companies in China in the first seven months of 2014, up 1.6 per cent from last year, compared with a 3.2-per cent increase in the first half of the year.

FDI in the January-July period mainly flowed into China’s service sector, which attracted $39.72 billion or 55.8 per cent of the total overseas investment during the period.

The FDI into the manufacturing sector in the January-July period fell 14.26 per cent to $25.2 billion, or 35.4 per cent of the total.

Top foreign investors in China were Hong Kong, Taiwan, Singapore, South Korea.

While investment from the EU, US and Japan dropped, that from South Korea and UK has increased this year.

Investment from the United Kingdom and South Korea remained strong in the first seven months, up by 61.2 per cent and 34.6 per cent, respectively.

With frictions over contested territory fueling Sino-Japan tensions, Japanese investors cut their investment to China by 45.4 per cent to $2.83 billion during the period.

Investment by the US and European Union was down by 17.4 per cent and 17.5 per cent, respectively.

On the other hand, the outbound direct investment (ODI) by Chinese non-financial companies soared 84.9 per cent from previous year to $9.21 billion in July.

The Commerce Ministry said the sharp increase in ODI contributed to the 4-per cent annual growth for the first seven months, during which Chinese investors made $52.55 billion of investment in 149 countries or regions.

Source: Agencies