FOREIGN direct investment inflow to China fell at a faster pace in the first month of 2013, the Ministry of Commerce said today.
Inbound investment in China, excluding funds flowing into financial sectors, dropped 7.3 percent year on year to US$9.27 billion in January, widening from December's fall of 4.5 percent and extending the downward trend to an eight consecutive month, ministry data showed.
"The fall likely reflects weaker perception of China's growth among foreign businesses after the economy slowed to a 13-year low last year and as its growth potential has been lowered by weaker outlook for main export markets," said Dariusz Kowalczyk, senior economist at Credit Agricole CIB in Hong Kong.
Commerce ministry spokesman Shen Danyang said the decline was "not small" but there are still positive signs as the number of foreign companies newly established in China increased 34.3 percent to 1,883 last month.
Shen expected foreign direct investment in China to maintain stable in 2013 but cautioned against the grim external situation.
The ministry announced last month that foreign direct investment in China posted the first annual fall in three years to US$111.7 billion in 2012, down slightly from 2011's record high of US$116 billion.
China's manufacturing sector last month absorbed US$4.43 billion in foreign direct investment, representing an annual decline of 5.8 percent, data showed.
Funds flowing into the service sector fell 9.8 percent from a year earlier to US$4.03 billion, led by a 14 percent cut in foreign investments in the real estate market.
Investment from the 27-member European Union surged 81.8 percent to US$820 million during the month, with increases of 309.6 percent, 4060.4 percent and 325.2 percent in funds were seen from France, Sweden and Denmark, respectively. Capital from Japan shrank 20 percent to US$640 million and US investment in China was also down by 20 percent to US$270 million.
China's non-financial outbound direct investment continued its upward trend in January, rising 12.3 percent to US$4.91 billion in January as domestic investors pumped money into 777 overseas companies in 123 countries and regions.