Foreign direct investment in China

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Foreign direct investment (FDI) into China increased 5.5 percent in the first three months of the year despite faltering in March, the government said Thursday, though outbound investment slumped.

FDI, which excludes investment in financial sectors, totalled $31.55 billion in the March quarter, the commerce ministry said in a statement.

However, investment in March declined 1.47 percent to $12.24 billion, it said.

“Major Asian countries' and regions' investment in China generally maintained a steady growth momentum,” ministry spokesman Shen Danyang said.

Foreign investment into China rebounded in 2013 to $117.59 billion as confidence in the country's growth potential picked up, but the forecast this year is for slowing expansion in gross domestic product (GDP).

China announced Wednesday that GDP grew 7.4 percent in the first quarter, slowing from 7.7 percent in October-December and marking the slowest expansion in 18 months.

During the first quarter, FDI from the 10-member Association of Southeast Asian Nations (ASEAN) increased 7.84 percent to $1.97

billion, the ministry said.

Investment from the United States fell 1.91 percent to $1.04 billion, while that from the European Union (EU) slumped 24.52 percent to $1.55 billion.

Separately, Chinese overseas investment, excluding financial sectors, fell 16.5 percent in the first quarter year-on-year to $19.9 billion, the ministry said, with investment to Hong Kong, ASEAN and European Union leading the decline.

Investment to seven economies - Hong Kong, ASEAN, the EU, Australia, the US, Russia and Japan - amounted to $12.63 billion, or 63.5 percent of the quarterly total, the ministry said.

Chinese investment to the EU declined seven percent, it said.

“Two-way investment between China and the EU declined in the first quarter due to factors such as specific projects, industries and areas,” Shen said.

“But we think the fall will be temporary rather than a trend.”

Investment to the United States, however, jumped 105.2 percent to $1.07 billion.

China's total outstanding overseas investment in non-financial sectors as of the end of March stood at $545.6 billion, the ministry said.

Investment overseas rose last year, hitting $90.17 billion, and officials said it could overtake FDI this year. - Sapa-AFP


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