Foreign direct investment (FDI) into China increased 10.4 percent year-on-year in the first two months of the year, the Chinese government said yesterday, while the country’s outbound investment slumped.
FDI, which excludes investment in financial sectors, totaled US$19.31 billion cumulatively in January and last month, the Chinese Ministry of Commerce said in a statement.
Foreign investors “remained confident in investment in China,” ministry spokesman Shen Danyang (沈丹陽) told reporters, but acknowledged that “international investment remained low and there were various development problems within the country.”
He did not give specifics, but a string of data has indicated a slowdown in the world’s No. 2 economy.
Separately, Chinese overseas investment in the two months fell 37.2 percent year-on-year to US$11.54 billion, the ministry said, adding that Chinese investment in Hong Kong and the EU led the decline.
Yet Shen said that a high comparison base in the same period last year was behind the fall, mainly due to the close of China National Offshore Oil Corp’s (中國海洋石油) US$15 billion takeover of Canada’s Nexen Inc.
“Therefore, overseas investment in the first two months last year spiked, which ... made this year’s year-on-year comparison base very high,” he said.
The January-to-February figure would have marked a 33.6 percent increase if the Nexen deal was excluded from the comparative data, he added.
By far the greatest proportion of investment in China comes from a group of 10 Asian countries and regions, including Taiwan, Hong Kong, Japan, Thailand and Singapore.
FDI from those economies rose 11.6 percent to US$16.94 billion, the ministry said. US investors piled US$711 million into the country during the period, up 43.3 percent.
“Investment from the 10 Asian countries and the US maintained relatively fast growth,” the ministry said. Investment from South Korea soared 224 percent to US$834 million, the ministry said, but did not give an explanation for the leap.
Investment from the EU declined 13.8 percent to US$1.05 billion.
Of China’s outbound investment, 65.4 percent of the total, or US$7.55 billion, went to Hong Kong, ASEAN, the EU, Australia, the US, Russia and Japan. Yet the amount being invested in Hong Kong, the EU and ASEAN declined 62.9 percent, 11.6 percent and 2.2 percent respectively. The Hong Kong decline was also related to the Nexen deal, as part of the takeover funds went through the financial hub, Shen said.
Investment in the US jumped 45.6 percent, while that to Australia gained 31 percent. Investment to Russia and Japan “at least doubled,” the ministry said, without providing amounts or specific percentage changes.
China’s total outstanding overseas investment as of the end of last month stood at US$537.2 billion, the ministry said.