Ministry denies anti-trust link to FDI
Print Edition
China’s foreign direct investment plummeted in July, but a Ministry of Commerce spokesman denied the fall was related to an anti-monopoly investigation.
Foreign investors channeled US$7.8 billion of funds into China last month, down 16.9 percent from a year earlier, the ministry said yesterday. It increased 0.2 percent in June but contracted in May by 6.7 percent.
Shen Danyang said that it was “normal” for foreign investment to fluctuate from month to month against the background of China’s industrial restructuring efforts.
“The decline in a single month can’t be used to interpret a general trend,” Shen said.
He added: “It is wrong to associate it with the recent anti-trust investigation or establish any other unfounded connections.”
Shen said the investigation, which began late last month and involved multinationals including Mercedes-Benz, Microsoft and Qualcomm, was not solely targeted at foreign companies.
Under China’s anti-monopoly law, which came into effect in 2008, companies found in breach face fines of between 1 percent and 10 percent of their annual revenue. Last week, four BMW dealerships were fined between 150,000 yuan (US$24,400) and 937,900 yuan over inspection fees.
On Sunday, Jiangsu Province’s price bureau said Mercedes-Benz had been guilty of manipulating the price of after-sales services.
Shen said the majority of foreign companies were able to abide by Chinese laws and it was impossible for foreign companies to be “scared away” by the investigation.
“The Chinese government welcomes foreign investment as always,” Shen said. “We will try to create a fair and transparent legal environment to protect the rights of foreign investors.”
Shen said the government would be closely monitoring the trend of global investment and would further open the market and provide better services for investors.
Li Maoyu, an analyst at Changjiang Securities Co, said foreign direct investment may grow at a relatively slow pace over the next few months, but it would become more stable.
In the first seven months, foreign direct investment edged down 0.35 percent to US$71.1 billion with 13,247 new foreign ventures being established on the Chinese mainland.
Investment from Japan dropped 45.4 percent during the January-July period, while the United States, the European Union and the ASEAN countries reduced their investment by 17.4 percent, 17.5 percent and 12.7 percent respectively.
In comparison, funds from the UK jumped 61.2 percent during the period, and those from South Korea rose 34.6 percent.
As a sign of China’s growing efforts to restructure the economy, foreign investment flowing into China’s service sector gained 11.4 percent to US$39.7 billion in the first seven months, or 55.8 percent of the overall basket.
In comparison, the manufacturing sector drew US$25.2 billion, down 14.2 percent on an annual basis to account for 35.4 percent of the basket.
Meanwhile, China’s outbound direct investment expanded 4 percent to US$52.5 billion in the January-July period, the first increase since February after the effect of a high comparative base had diminished.
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