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People's Daily Online>>China Business

First FDI drop in 28 months

By Ding Qingfen (China Daily)

10:22, December 16, 2011

BEIJING - Foreign direct investment (FDI) fell almost 10 percent last month from a year earlier, the first drop in 28 months, as Vice-Premier Li Keqiang called for a boost to domestic consumption on Thursday.

Amid the "grim and complicated" global outlook, China needs to strengthen market capacity and growth by encouraging private investment, increasing investment in affordable housing projects and accelerating urbanization, Li said.

The vice-premier also called for greater promotion of the service industry, which he said is the largest "employment creator and innovation driver".

Experts said a growing and stable Chinese market will help lure foreign investment, and they predicted that the world's second-largest recipient of foreign investment will recover lost ground in the long run.

According to the Ministry of Commerce, FDI fell 9.76 percent from a year earlier to $8.76 billion in November.

China last witnessed a monthly drop in FDI in August 2009 amid the world's worst financial meltdown in seven decades.

"The only thing that explains the drop in November is that the debt crisis in the European Union and the US economy have both taken a toll in the confidence of foreign investors," said Zhu Baoliang, chief economist at the State Information Center, a government think tank.

From January to November, US investment in China dropped by 23 percent year-on-year to $2.74 billion, and investment from the EU rose marginally by 0.29 percent to $5.98 billion.

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