Challenges dent March FDI
Print Edition
FOREIGN direct investment in China fell in March for the first time in 14 months, reflecting challenges for overseas investors in an increasingly sophisticated environment.
Foreign investors channeled US$12.2 billion into the Chinese mainland last month, down 1.47 percent from a year earlier, Ministry of Commerce figures released yesterday showed.
That contrasted with a 10.44 percent increase in the first two months, and was the first contraction since January last year.
However, the first-quarter total of US$31.5 billion was still up 5.5 percent year on year.
March saw a significant decrease in investment from Japan and the European Union, with declines of 47 and 24 percent respectively, while funds from the United States were down 1.9 percent.
ASEAN countries, on the other hand, raised their input by 7.8 percent, with South Korea more than doubling its investment.
Meanwhile, outbound direct investment fell 16.5 percent on an annual basis in the first three months to US$19.9 billion, with the decrease narrowing from the cut of 37.2 percent in the January-February period.
Shen Danyang, a ministry spokesman, said it was normal for investment, both inbound and outbound, to fluctuate.
“The declines in March won’t affect stable growth of foreign investment for the year,” Shen said. “We are confident of the outlook because China remains a very important destination for foreign investment.”
China’s stability, market potential, human resources and support facilities had strengthened China’s competitiveness and made it a popular destination for foreign investment, Shen said.
Foreign investment flowing into China’s service sector gained 20.5 percent year on year to US$17.3 billion in the first quarter, making up 55 percent of the overall basket. In comparison, the manufacturing sector drew US$11.6 billion, down 11 percent on an annual basis.
Foreign investors are facing an increasingly tricky landscape in China, with the country’s growth slowing and production costs rising because of a shrinking labor force.
Official data showed growth was 7.4 percent in the first three months, the slowest pace since 2012’s third quarter.
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