Thu, Sep 20, 2012 - Page 15 News List

FDI in China fell again last month amid global slump

AFP and Bloomberg, BEIJING

Foreign direct investment (FDI) in China fell again last month, the government said yesterday, amid stubborn weakness in both the global and Chinese economies.

Investment from overseas declined by 1.4 percent from a year earlier to US$8.3 billion last month, the commerce ministry said in a statement.

The monthly fall continued a downward trend that goes back to November, with the exception of May, when FDI eked out a marginal gain of 0.05 percent.

The government has blamed the slump on the slowdown in global economic growth, the prolonged European debt crisis and rising costs and weak demand within China.

For the first eight months of the year, overseas companies invested US$75 billion in factories and other projects in China, down 3.4 percent from the same period a year ago, the statement said.

Investment by the 27 member countries of the EU slumped by 4.1 percent on year in the January-August period, while that from the US dropped by 2.9 percent, it said.

Fund flows from 10 Asian countries and regions, including Hong Kong, Japan, the Philippines, Malaysia, Singapore and South Korea also slumped by 5 percent year-on-year in the period, it said.

In related news, Chinese developers’ credit outlook improved as a recovery in home prices eased liquidity pressures and a slowing economy limited the government’s incentive to further tighten policy, Standard & Poor’s said.

The credit rating company may “see some positive rating actions” in the next six months as defaults by so-called distressed developers are less likely after asset sales, S&P said in a report on Tuesday.

Prices for newly constructed homes in China rose in fewer cities last month than the previous month, reducing the likelihood that policy makers would take further steps to constrain property prices as growth in the world’s second-biggest economy cools.

Thirty-five of 70 cities covered by the National Bureau of Statistics had price gains last month from the previous month, compared with 49 in July, according to a release in Beijing on Tuesday.

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