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People's Daily Online>>China Business

Fourth straight monthly fall in FDI

By Ding Qingfen (China Daily)

08:13, March 16, 2012

Foreign direct investment (FDI) shrank in February from a year earlier, the fourth straight fall, while investment from Europe witnessed a sharp decline, according to the Ministry of Commerce.

Experts were not optimistic about the inflow of foreign investment into China as the European debt crisis continues and domestic economic growth slows down.

FDI last month dropped by 0.9 percent year-on-year to $7.73 billion, following a 0.3 percent drop in January.

"This is not good news, it reflects the gloomy global economy," said Wang Zhile, director of the research center for transnational cooperation at the ministry.

It is difficult to be optimistic about the outlook for FDI "given the doubts in the minds of foreign companies about the global economy and China's foreign investment environment," he said.

The first two months of the year have seen investment into China from the 27 EU nations drop by 33.32 percent, from the previous year, to $906 million.

"It's hard to tell whether investment from the region will continue to drop sharply," ministry spokesman Shen Danyang said.

But it is difficult to be optimistic "as global investors are too prudent and unwilling to spend money", Shen said.

German Finance Minister Wolfgang Schaeuble and his French counterpart Francois Baroin said on Tuesday that the worst of the eurozone crisis appeared to be over, but they warned member states that they will have to continue reform.

Outflows from the Asia-Pacific region and the United States are positive. From January to February, investment from 10 Asian nations and regions, including Japan, the Republic of Korea and Singapore, increased by 2.66 percent year-on-year to $15.38 billion, and from the US rose by 0.87 percent to $525 million.

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