Foreign investment in PRC up 6.2%

AFP, BEIJING

Fri, Oct 18, 2013 - Page 15

Foreign investment in China rose 6.2 percent year-on-year in the first nine months this year, the government said yesterday, but it warned the world’s No. 2 economy still faced domestic and external headwinds.

And while the commerce ministry said Chinese investment overseas had increased sharply over the first nine months of the year, the amount of cash going to Japan had almost halved as a diplomatic row with Tokyo drags on.

Beijing said Foreign Direct Investment (FDI), which excludes financial sectors, reached US$88.6 billion for January to September.

For last month alone FDI climbed 4.9 percent to US$8.84 billion, well up from the 0.62 percent rise seen in August. Yet the figure is sharply down from 24.13 percent seen in July and 20.12 percent in June.

Ministry spokesman Shen Danyang (沈丹陽) said the size of full-year FDI was expected to be “stable”, but noted that uncertainties remained.

“Given the complex and changing global economic situation, the sustained and stable growth of the Chinese economy is facing pressure, and challenges such as insufficient foreign demand and rising labor costs,” Shen told a news conference.

“These will affect to some extent China’s foreign investment environment,” he said.

The amount of money coming from the EU rose 23 percent year-on-year to US$5.94 billion during the January-to-September period, while from the US it increased 21.3 percent to US$2.88 billion.

The vast majority, however, comes from a group of 10 Asian countries and regions including Hong Kong, Taiwan, Japan, Thailand and Singapore. FDI from the region jumped 7.5 percent to US$76.3 billion from January to September.

“Investment from the 10 Asian countries and regions, the EU and the US maintained rather fast growth,” the commerce ministry said.

Separately, Chinese investment abroad rose 17.4 percent year-on-year to US$61.64 billion during the nine months, the ministry said.

However, the amount of cash going to Japan slumped 45.5 percent. The plunge comes as the two countries are embroiled in a sovereignty dispute over islands they both claim in the East China Sea — known as Diaoyutais (釣魚台) in China and Senkakus in Japan. The islands are also claimed by Taiwan.

After data last weekend showed a surprise fall in exports last month, Shen added that China’s trade “is still facing a severe and complicated external environment.”

He singled out sharply slowing growth in emerging markets that has dampened demand for Chinese goods.

Yet the government is still confident that trade will maintain “stable development” and expects exports to see marginal growth in the next two months thanks to supportive policies and an improving domestic economy, Shen said.