Main­land FDI up 5.2% in July year-on-year on M&A: gov’t

The China Post - - WORLD BUSINESS -

For­eign in­vest­ment into main­land China rose 5.2 per­cent in July com­pared to the pre­vi­ous year, largely on the back of merg­ers and ac­qui­si­tions by over­seas firms, the com­merce min­istry said on Wed­nes­day.

Over­all for­eign di­rect in­vest­ment (FDI), which ex­cludes fi­nan­cial sec­tors, was US$8.22 bil­lion last month, the min­istry said, and US$76.63 bil­lion in the first seven months of the year, a 7.9 per­cent in­crease.

“The amount and the pro­por­tion of for­eign cap­i­tal merg­ers and ac­qui­si­tions rose sharply be­tween Jan­uary and July,” it said in a state­ment.

The pro­por­tion of M&A ac­tiv­ity in FDI rose to 18.2 per­cent in the Jan­uary-July pe­riod, it added, up from 4.6 per­cent in the same seven months a year ago.

Main­land China’s out­bound over­seas di­rect in­vest­ment (ODI) last month was US$7.5 bil­lion, a sharp de­cline of 18.6 per­cent com­pared to a year ear­lier and the sec­ond con­sec­u­tive monthly fall af­ter one of 15.5 per­cent in June, the min­istry said.

Com­merce min­istry spokesman Shen Danyang at­trib­uted the drops to a high com­par­a­tive base.

“There were sev­eral big-ticket ODI projects in June and July last year,” he told re­porters, adding that there were no sim­i­larly large deals in those months this year.

“Many ODI projects were in the energy and oil sec­tors in the past,” he added. “In­vestors this year have been tak­ing a wait-and-see stance due to the slumps in prices of oil and min­er­als and other in­ter­na­tional com­modi­ties.”

Full year ODI growth is still ex­pected to be 10-15 per­cent or “even higher,” he said.

ODI in the Jan­uary-July pe­riod rose 20.8 per­cent year-on-year to US$63.5 bil­lion.

FDI growth has slowed in re­cent years ow­ing to fac­tors in­clud­ing ris­ing costs, com­pe­ti­tion from South­east Asian coun­tries, and con­cerns over of­fi­cial in­ves­ti­ga­tions into for­eign com­pa­nies.

Main­land China drew a to­tal of US$119.6 bil­lion of FDI in 2014, up 1.7 per­cent, while ODI was up 14.1 per­cent at US$102.9 bil­lion, pass­ing the US$100 bil­lion mark for the first time.

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