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People's Daily Online>>China Business

FDI falls for 4th month on EU debt woes

By Wang Yanlin (Shanghai Daily)

16:40, March 15, 2012

Foreign direct investment in China fell for the fourth straight month in February as European investors continued to curb spending amid their debt crisis.

In comparison, capital from Asia and the United States picked up against the broad downtrend.

Foreign investors channeled altogether US$7.73 billion to China last month, the value of which declined 0.9 percent from a year earlier, the Ministry of Commerce said today.

The pace in February weakened from a reduction of 0.3 percent in January, but was better than December's cut of 12.7 percent.

The 27-member European Union placed US$906 million in China in the first two months – a drop of 33.3 percent from a year earlier.

But encouragingly, investment from 10 Asian countries and regions, including Japan, Philippines, Thailand and Malaysia, still jumped an annualized 2.66 percent to US$15.3 billion, while the input from American investors upped 0.87 percent to US$525 million.

"Less foreign investment is expected because companies are reining in spending amid so many uncertainties," said Xue Jun, an analyst at CITIC Securities Co.

"But apart from caring about the volume of foreign investments, we should pay more attention to their quality, making it in line with our growth target set up for the 12th Five-Year Plan."

China has lowered its economic growth target to 7.5 percent this year from 8 percent in place since 2005, aiming at a more balanced and healthier growth pattern.

Foreign investment in China's manufacturing sector lost 0.1 percent from a year earlier to US$8.3 billion between January and February, while that in the service industry fell 3.5 percent to US$8 billion.

Meanwhile, China's outbound non-financial foreign direct investment surged 41.1 percent year on year to US$7.4 billion in the first two months, up dramatically from last year's growth of 1.8 percent.

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