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FDI inflows to China decline in March

Foreign direct investment (FDI) inflows to China fell for the fifth straight month.

Written by Agencies | Beijing | Published: April 17, 2012 5:25:37 pm

Foreign direct investment (FDI) inflows to China fell for the fifth straight month in March to USD 11.76 billion as companies curbed investment amid global economic slowdown.

The FDI declined 6.1 per cent year-on-year to USD 11.76 billion in March,following a 0.9-per cent decline in February and a 0.3-per cent fall in January,the Ministry of Commerce announced today.

China received USD 29.48 billion of FDI in the first three months,down 2.8 per cent from a year earlier,Ministry of Commerce Spokesman Shen Danyang told reporters here.

China’s campaign to curb property prices and speculation also affected inflows as the real estate sector attracted nearly one-fourth of the total FDI in recent years. However,the investment decline in the sector is in line with the government’s macro-regulation policies,he said.

“As for the outlook for this year,we believe the situation will be quite grim. There is still no resolution to the European debt crisis and European companies’ ability to

invest abroad have been reduced,” Danyang said,adding that competition has increased from other developing countries vying for foreign capital.

Investment from the European Union plunged 31.2 per cent in the first quarter from a year ago.

However,that from the United States and Japan climbed by 10.1 per cent and 13.2 per cent,respectively,Xinhua quoted Danyang as saying.

China’s economy expanded 8.1 per cent in the first quarter from a year earlier,marking the slowest pace in almost three years.

Rising labour costs,resource strains and fundraising problems might also dampen foreign companies’ willingness to expand investment in China,he said.

The nation approved the establishment of 5,379 foreign invested companies in the first quarter,down 9.4 per cent year-on-year.

However,China’s outbound investment has surged.

First quarter non-financial overseas direct investment rose by 94.5 per cent year-on-year to USD 16.55 billion.

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