Healthy growth in FDI sends strong vote of confidence
0 Comment(s)
Print
E-mail China Daily, February 19, 2014
Foreign direct investment in China showed robust growth in January, reflecting global investor confidence in the world's second-largest economy.
The Ministry of Commerce said on Tuesday that the strong FDI inflow gained support from the nation's reform initiative started last year, an improved investment environment and the opening-up of the service sector.
Foreign investment surpassed $10.7 billion last month, up 16.1 percent year-on-year, the fastest pace since July, according to the ministry.
"The double-digit FDI inflow is the best response to the doubt about China's investment environment and the country's economic prospects," Shen Danyang, ministry spokesman, told reporters.
Recent signs pointed to weakening growth momentum in the Chinese economy. A decline in the purchasing managers index in January suggested contraction in manufacturing and services. A near-default trust product caused widespread fears in financial markets while the record new credit last month added concerns on limiting turbulence risks from defaults and bad loans.
Better-than-expected export data in January eased worries of a slowdown but aroused suspicions of a resurgent inflow of hot money covered by fake trade invoices. Shen said that trade figures last month were within expectations.
Wang Jun, an expert at the China Center for International Economic Exchanges, a government think tank, said, "China's economic outlook will be more optimistic. Growth between 7 and 8 percent, compared with the performance of other emerging economies, will be attractive to global investment."
The Royal Bank of Scotland predicted China's economy would grow 8.2 percent this year, up from 7.7 per cent in 2013, making it Asia's fastest-growing economy.
China's comprehensive reforms, launched late last year, greatly enhanced the willingness of overseas enterprises to invest as the economic restructuring measures helped expand domestic demand and improve the investment environment, the ministry spokesman said.
"The comprehensive advantage of attracting FDI is looming with huge potential in domestic demand, increasing talent supply and improving industrial facilities," Shen said.
FDI in China's service sector jumped 57 percent year-on-year to $6.33 billion in January, highlighting the government's efforts to open up the sector, Shen said. FDI inflow in manufacturing continued to fall behind and dropped 21.7 percent to $3.47 billion.
"We expect FDI to maintain sound momentum this year," Shen said. "The FDI inflows into high-end manufacturing, modern services and energy saving and environmental industries will benefit China's industrial restructuring and improve the efficiency of FDI."
More Chinese enterprises are tapping overseas markets. In January, China's outbound direct investment into non-financial sectors hit $7.23 billion, up 47.2 percent year-on-year, according to the ministry.
Despite strained political ties, investment in Japan soared 500 percent year-on-year in January, probably supported by large projects, Shen said. China's investment in Russia jumped 281 percent, and that in the US went up 14 percent.
Follow China.org.cn on Twitter and on Facebook to join the conversation.
Go to Forum >>0 Comment(s)