InfoGraphic

Foreign direct investment slows down

(China Daily)
Updated: 2010-10-16 08:55

Officials remain confident on FDI, despite a slight reduction

BEIJING - Foreign direct investment (FDI) in China registered another monthly single-digit growth in September. Government officials and experts say they're still confident about the nation's FDI prospects although they do have concerns about a slow-down.

The Ministry of Commerce announced on Friday that China's FDI in September grew by 6.14 percent to $8.38 billion from a year earlier.

That's the second consecutive month that FDI has posted single-digit growth - it had remained in double digits for the five months ending in July.

Yao Jian, a spokesperson from the ministry, said he is upbeat about the FDI prospects in months ahead. "From a long-term perspective, China's FDI is on an upward trend, as domestic consumption expands, and the labor quality improves," he said.

But the concern is how to "maintain high FDI growth rate in the short term" especially when the country is adjusting the structure of foreign investment to become more service-oriented and to benefit regions in the center and west of the country, Yao said.

Related readings:  China's Sept FDI hits $8.4b, up 6.1% y-o-y  China's August FDI hits $7.602b  China remains top FDI destination  FDI guidelines may spur new global alliances

It's the fourteenth month that China has registered positive FDI growth. During the first three quarters, China's FDI grew by 16.6 percent to $74.34 billion, compared with the same period last year, and is almost back to the pre-crisis level of $74.37 billion in 2008, said the ministry.

"There are very few nations like China that can register positive FDI growth even amid a financial crisis. China is a very attractive market for foreign investors, and we have no doubts about the prospects. The monthly figure does not tell the whole picture," said Long Guoqiang, director of the Research Department of Foreign Economic Relations at the Development Research Center of the State Council.

In September, investment flows into the west of the country grew by 281 percent from a year earlier, to $1.04 billion - 274.5 percentage points higher than the national average. Meanwhile, from January to September, growth was 48.8 percent, 32.2 percentage points higher than average.

During the first nine months, the service sector witnessed growth of 32.1 percent, while the figure was 1.6 percent for manufacturing.

In April, China launched new FDI guidelines, which emphasized that the government has encouraged more investment into the service sector and China's central and western regions.

Despite the complaints about China's foreign investment environment during the past few months, the government has repeated that the country welcomes foreign investment and will try to create a more favorable and fairer environment for foreign businesses.