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People's Daily Online>>China Business

City's FDI defies trend, rises sharply for services

By Wang Yanlin (Shanghai Daily)

10:00, March 21, 2012

FOREIGN direct investment in Shanghai expanded vigorously last month, defying the national trend of falling investments from overseas, and officials attributed it to capital flowing into the services sector, especially for the Shanghai Disneyland project.

The city attracted a total of US$1.45 billion contracted foreign investment in February, up 29.3 percent from a year earlier, the Shanghai Statistics Bureau said.

The pace weakened slightly from the city's average of 31.1 percent last year but was faster than January's 12.5 percent and was much better than the national performance, which fell 0.9 percent in February over a year ago.

The number of new foreign projects in Shanghai fell 19.4 percent year on year to 175 units, as larger and more capital-intensive projects held sway.

"Shanghai has managed to brave the difficulties by continuously improving the city's business environment," said Wang Zehua, an analyst at the bureau. "Also, Shanghai has comparative advantages with its stable economic growth and a mature infrastructure for foreign investors, making them feel safer than investing elsewhere amid all the uncertainties."

Last month, US$1.27 billion, or nearly 90 percent of the total contracted FDI in Shanghai, was pumped into the city's services sector, up 25.2 percent from a year earlier. The bureau did not specify the destinations or origins of these foreign investments, but an official at the Shanghai Commerce Commission, who declined to be named, confirmed that a big source of the capital was for the Shanghai Disneyland project.

According to the National Bureau of Statistics, investment from the United States increased in both January and February, a sharp change from last year's drop of 26 percent.

Shen Danyang, a spokesman for the Ministry of Commerce, said earlier that this came largely thanks to investments put in position for the Shanghai Disneyland.

The core facilities of Shanghai Disneyland, including infrastructure of roads and pipelines, will be under construction next month. The first phase of the theme park will cost 24.5 billion yuan (US$3.8 billion).

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