China’s foreign direct investments rise

Published Feb 18, 2014

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Beijing - Foreign direct investment (FDI) into China increased 16.1 percent in January, the government said Tuesday, with cash infusions from Asian economies and the United States showing the steepest rises.

FDI, which excludes investment in financial sectors, totalled $10.8 billion (R billion) in January, the commerce ministry said in a statement.

Separately, Chinese overseas investment rose 47.2 percent to $7.23 billion in January, the ministry said, including a huge increase to Japan, a country with which China is embroiled in a bitter territorial dispute.

Investment to Japan soared 500 percent in January from the same month in 2013, with that to Russia surging 282 percent, the ministry said.

It did not give totals or explanations, but the Japanese figure will have had a low comparative base as tensions between the two countries were already strained last year by the row over uninhabited islands in the East China Sea claimed by both but controlled by Japan.

By far the greatest proportion of investment into China comes from a group of 10 Asian countries and regions including Hong Kong, Taiwan, Japan, Thailand and Singapore.

FDI from those economies rose 22.2 percent to $9.55 billion, the ministry said.

US investors put $369 million into the country in January, up 34.9 percent.

“Investment from the 10 Asian countries and regions and the US maintained steady and fast growth,” ministry spokesman Shen Danyang said in the statement.

Shen later told reporters: “We expect FDI to maintain a good growth momentum this year.”

January's double-digit increase showed that investors were still confident in China's economic outlook, he added.

Growth was mainly driven by service sector investments, he said.

Investment from the European Union, however, declined sharply, decreasing 41.3 percent to $482 million.

Of China's outbound investment, 63.3 percent or $4.58 billion went to Hong Kong, the Association of Southeast Asian Nations (ASEAN), the EU, Australia, the US, Russia and Japan.

Investment to Hong Kong and the US gained 53.3 percent and 14 percent, respectively.

But investment to the EU declined 37.8 percent, while that to ASEAN was down 32 percent.

Investment to Australia dropped 24.2 percent.

The figures come after foreign investment into China rebounded in 2013 to $117.59 billion as confidence in the country's growth potential picked up.

It had declined the year before.

Investment by China overseas also rose last year, hitting $90.17 billion, and officials said it could overtake the incoming total as early as this year. - Sapa-AFP

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