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Trend still positive despite FDI inflow drop, says MOC

(Xinhua)

08:21, October 20, 2012

BEIJING, Oct. 19 (Xinhua) -- Despite the inflow of foreign direct investment (FDI) dropping for the fourth consecutive month in September, the general trend is still positive, according to China's Ministry of Commerce.

Foreign investment dropped 6.8 percent year-on-year to 8.43 billion U.S. dollars in September, ministry spokesman Shen Danyang said at a monthly press conference on Friday.

The figure brought the total FDI inflow for the first nine months of the year to 83.42 billion U.S. dollars, down 3.8 percent year-on-year, Shen said.

"Although the FDI inflow saw slight declines, there has not been any substantial declines," he said.

Investment from developed economies including the European Union (EU), the U.S. and Japan saw both rises and drops, but the drops narrowed in general, Shen said.

In the first nine months, investment from the U.S. dropped 0.63 percent year-on-year to 2.37 billion U.S. dollars, down from a 2.9-percent drop in the January-August period.

Investment from the EU dropped 6.3 percent year-on-year to 4.83 billion U.S. dollars. Investment from Japan surged 17 percent from a year earlier to 5.62 billion U.S. dollars, he said.

Shen said that the general trend of foreign investment flowing in China was positive and healthy. "The structure, quality and level of FDI have shown some heartening signs."

FDI into the service industry, excluding the real estate sector, rose 1.6 percent year-on-year in the first three quarters, he said.

Foreign investment in the real estate sector dropped 5.62 percent year-on-year amid the country's efforts to rein in runaway property prices.

China's central regions saw FDI inflow climbing 16.5 percent year-on-year in the first nine months, while investment in the western and eastern regions dropped by 1.8 percent and 5.6 percent, respectively.

"Based on our talks with large foreign enterprises investing in China, they still have full confidence in the country's long-term development," Shen said.

The country approved the establishment of 18,025 new foreign-funded companies in the first nine months, down 11.7 percent from a year ago, Shen said.

Overseas direct investment (ODI) made by China in non-financial sectors around the world surged 28.9 percent to 52.52 billion U.S. dollars in the first nine months.

Shen attributed the strong growth in ODI to the country's drive to encourage domestic companies to invest overseas. Also, other countries around the world are looking to attract investment as they pursue a recovery in the economy.

The FDI data came after the release of other economic indicators for September, including the inflation rate, bank lending, exports and industrial output, which showed some stabilizing signs.

China's economy expanded by 7.7 percent year-on-year in the first three quarters, higher than the 7.5-percent annual economic growth target set for 2012.

The Consumer Price Index (CPI), the main gauge of inflation, rose 1.9 percent year-on-year in September, easing from 2 percent in August.

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