The slump of foreign investment in the real estate market is the major reason behind the plummeting foreign capital flow into China’s service sector in the first half of the year, said an official with the Ministry of Commerce on July 30.
MOFCOM statistics showed that the actual use of foreign investment in China’s real estate sector decreased by 36.9 percent over the first six months of 2009, accounting for 68.3% of the reduction of the actual use of FDI in the service sector.
FDI in the service sector plunged 27.7 percent year on year over the first half of the year, shrinking faster by nearly 10 percent of the total FDI into China’s non-financial sectors.
If the FDI into the real estate market were not considered in the whole picture, then the slump of FDI into the service sector would have stood at about 18 percent, the same level as the 17.9 percent decrease of the country’s total actual use of FDI.
Vice Director-General Sun Peng of the Foreign Investment Administration, MOFCOM, told reporters at a press conference that there was no special restriction on FDI into the real estate market.
He added that the government was closely watching the FDI slump in the real estate sector. “MOFCOM will guide foreign investment in the real estate market in line with the existing industrial policy,” he said.
There were reports recently that MOFCOM had put forward a proposal to the State Council to relax the regulation of FDI in the real estate market. But MOFCOM has denied this.
FDI into China has been down for nine months since October 2008.
By People's Daily Online
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