FDI into main­land China ac­cel­er­ates in March: gov’t

The China Post - - FRONT PAGE -

For­eign di­rect in­vest­ment into China picked up in March, of­fi­cial fig­ures showed Thurs­day, though out­bound in­vest­ment from the world’s sec­ond-largest econ­omy slowed sharply.

FDI rose 2.2 per­cent year-onyear last month to US$12.4 bil­lion, the com­merce min­istry said, an ac­cel­er­a­tion from Fe­bru­ary’s 0.9 per­cent gain.

“In­vest­ment from ma­jor coun­tries and re­gions in China was gen­er­ally sta­ble,” the min­istry said in a state­ment.

For the first three months of 2015, FDI gained 11.3 per­cent to US$34.88 bil­lion, the fig­ures showed.

Over­seas di­rect in­vest­ment (ODI) in­creased 0.4 per­cent in March year-on-year to US$8.39 bil­lion, while for the first quar­ter it jumped 29.6 per­cent to US$25.79 bil­lion.

Both ODI and FDI ex­clude fi­nan­cial sec­tors.

China drew a to­tal of US$119.6 bil­lion of FDI in 2014, while ODI surged to US$102.9 bil­lion, pass­ing the US$100 bil­lion mark for the first time as Chi­nese com­pa­nies seek op­por­tu­ni­ties abroad with eco­nomic growth slow­ing at home.

China’s econ­omy ex­panded 7.4 per­cent last year, the slow­est since 1990, as au­thor­i­ties man­age a makeover of the coun­try’s growth model they hope will place con­sumer de­mand at cen­tre stage as op­posed to big ticket in­vest­ment projects.

The gov­ern­ment said Wed­nes­day the slow­down con­tin­ued into this year as the econ­omy ex­pand- ed 7.0 per­cent in Jan­uary-March, the worst quar­terly re­sult for six years.

The three-month in­crease in FDI was driven by a 30.5 per­cent year-on-year in­crease in in­vest­ment from the Euro­pean Union to US$2.02 bil­lion.

In­vest­ment from Bri­tain and France each rose to US$370 mil­lion, for gains of 40.0 per­cent and 258.7 per­cent re­spec­tively.

In­vest­ment from Saudi Ara­bia surged nearly 800 per­cent to US$240 mil­lion, the min­istry said, with­out giv­ing an ex­pla­na­tion.

In­vest­ment from Ja­pan, with which China is in a bit­ter dis­pute over ter­ri­tory and wartime his­tory, fell 12.3 per­cent to US$1.06 bil­lion, the fig­ures showed.

FDI from the United States dropped 40.4 per­cent to US$620 mil­lion, while that from the ASEAN group of Southeast Asian coun­tries fell 31.2 per­cent to US$1.35 bil­lion.

Decline in China’s In­vest­ment

Des­ti­na­tion

China’s ap­peal as an in­vest­ment des­ti­na­tion has been de­clin­ing in re­cent years ow­ing to ris­ing la­bor and land costs and com­pe­ti­tion from Southeast Asian coun­tries such as Viet­nam.

For­eign in­vestors have also com­plained of is­sues such as China’s chronic air pol­lu­tion as well as of­fi­cial cam­paigns and in­ves­ti­ga­tions into their busi­ness prac­tices.

Chi­nese first- quar­ter in­vest­ment to the EU surged more than eight-fold to US$3.54 bil­lion, the min­istry said, at­tribut­ing the gain mainly to a US$2.89 bil­lion in­vest­ment by state-owned oil gi­ant China Na­tional Petroleum Cor­po­ra­tion in the Nether­lands, which was in­cluded in the Fe­bru­ary fig­ures an­nounced last month.

It said Chi­nese in­vest­ment to ASEAN, Hong Kong, the U.S. and Rus­sia all gained, in­creas­ing 51.4 per­cent, 44.4 per­cent, 37.4 per­cent and 14.3 per­cent , re­spec­tively. The min­istry did not pro­vide to­tals.

In­vest­ment to Australia fell 66.3 per­cent, while that to Ja­pan de­clined 16.7 per­cent, it said.

China has been ac­tively ac­quir­ing for­eign as­sets, par­tic­u­larly en­ergy and re­sources, to power its econ­omy, with firms en­cour­aged to make over­seas ac­qui­si­tions to gain mar­ket ac­cess and in­ter­na­tional ex­pe­ri­ence.

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