Wed, Nov 21, 2012 - Page 15 News List

Foreign direct investment in China declines

DOWNTREND:Except for a marginal rise in May, FDI has dropped every month since November last year due to EU debt worries and a weak domestic economy

AFP, BEIJING

Foreign direct investment (FDI) in China fell again last month, the government said yesterday, as investors remained cautious amid global economic woes and China’s own slowdown.

Foreign companies invested US$8.3 billion in factories and other projects in China last month, down 0.24 percent from a year ago, Chinese Ministry of Commerce spokesman Shen Danyang (沈丹陽) said at a regular news conference.

The drop extended a broad downward trend stretching back to November last year. Since then, FDI has declined every month except May, when it rose a marginal 0.05 percent.

For the first 10 months of the year, FDI fell 3.45 percent on year to US$91.7 billion, Shen said.

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

The world’s second-largest economy has also slowed for seven consecutive quarters, expanding 7.4 percent in the three months ended Sept. 30, its worst performance since the first quarter of 2009.

Investment from debt-laden EU countries decreased by 5 percent year-on-year in the January-October period to US$5.2 billion, according to the ministry’s data.

Ten Asian countries and regions, including Hong Kong and Thailand, invested US$78 billion in China in the period, down 4.7 percent from a year ago.

Meanwhile, the US has overtaken the EU as China’s biggest export market, as the continent’s debt crisis has sent demand slumping.

Chinese customs figures for the first 10 months of this year showed that China’s exports to the US totaled US$289.3 billion, while shipments to the EU came to US$276.8 billion.

ASEAN has moved past Japan as China’s third-biggest export market, after China shipped US$125.3 billion in goods to Japan in the first 10 months of the year, compared with US$163.9 billion to the 10 ASEAN countries, according to customs figures.

Shen said China would probably miss its full-year target of 10 percent foreign trade growth this year due to sluggish overseas demand, particularly in Europe and Japan.

“The international economic situation this year has been severe and complicated. There have been many uncertainties, with slack foreign demand being the most severe one,” he said.

“It will be indeed very difficult to achieve this year’s 10 percent target for trade growth,” he said, but added it was premature to conclude what the full-year increase would turn out to be.

Chinese customs data showed foreign trade rose by just 6.3 percent in the first 10 months of the year from a year ago.

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