Chinese FDI rose 4.9% in first half of year


Thu, Jul 18, 2013 - Page 15

Foreign direct investment (FDI) into China rose 4.9 percent year-on-year during the first half of the year, official data showed yesterday, despite slowing growth in the world’s second-largest economy.

Outbound investment from China leapt 29 percent to US$45.6 billion, the Ministry of Commerce announced, with major increases in the crucial US and Australian markets.

Incoming FDI, which excludes financial sectors, increased to US$62 billion from January through last month, the ministry said. For last month itself, it rose 20.1 percent year-on-year to US$14.4 billion.

“Investment from Japan, the EU and US maintained rather rapid growth,” ministry spokesman Shen Danyang (沈丹陽) told reporters.

Japan invested US$4.7 billion in the six-month period, up 14.4 percent on year, with EU investment 14.7 percent higher at US$4 billion and that from the US rising 12.3 percent to US$1.8 billion.

The vast majority of investment into China comes from a group of 10 Asian countries and regions including Taiwan, Hong Kong, Japan and Singapore. Inflows from those economies gained 5.3 percent on-year to US$53.8 billion during the first half.

Inward investment fell last year for the first time in three years as clouds gathered over the global economy such as in Europe, while China suffered its own economic slowdown and political tensions soared with Japan.

“It is premature to come to the conclusion FDI has recovered with the single month data in June,” Shen said. “But FDI was relatively stable in the first half and gradually rebounded.

“We expect FDI to maintain steady growth in the second half of the year,” Shen said.

China’s economy grew at its slowest pace in 13 years last year as GDP expanded 7.8 percent.

In the first half of this year growth slipped again to 7.6 percent, Beijing said on Monday.

Chinese overseas investment increased significantly in the period, with money flowing into the US almost quadrupling, jumping 290 percent year-on-year.

It almost doubled into resource-rich Australia, where it went up 93 percent, and investment into the EU also rose 50 percent.

However, investment into Japan, with which China is embroiled in a row over disputed islands in the East China Sea, fell 9.1 percent.

Shen said the fall was mainly a result of a widening choice of investment destinations for cash-rich Chinese companies, as well as “investment barriers” in Japan.

“Whether the Japanese economy and its investment environment is the most ideal among all the countries and regions for [Chinese] companies to go is up to the market and the companies to decide,” he said.

In May China’s Shuanghui International (雙匯國際) announced it would buy US meats giant Smithfield for US$4.7 billion, while Australia is a crucial source of commodities for Beijing.

Mergers and acquisitions accounted for about 30 percent of China’s investment in the first half, Shen said, citing oil giant CNOOC’s (中國海洋石油) US$15.1 billion purchase of Canada’s Nexen — the largest ever overseas takeover by a Chinese firm — as an example.

The most appealing sectors for Chinese investors were construction, which surged 541 percent in January to June, science and technology (151 percent), mining (142 percent) and real estate (110 percent).