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China's FDI inflow falls for second month

Last Updated: Thursday, August 16, 2012 - 18:31

Beijing: Foreign Direct Investment into China fell for the second consecutive month in July to USD 7.58 billion, an 8.7 percent drop compared to the same period last year.

This brought the total FDI inflow for the first seven months of the year to USD 66.67 billion, down 3.6 percent year on year, the Commerce Ministry's spokesman Shen Danyang said.

Investment from the debt-plagued European Union dropped 2. 7 percent year on year to USD 3.97 billion in January-July period, Shen said.

In the first half of the year, investment from the EU, China's largest trade partner, edged up one percent from a year ago, statew-run news agency Xinhua reported.

In the first seven months, China attracted USD 1.96 billion in FDI from the United States, up one percent year on year, he said.

Shen said the dwindling investment inflows were the combined result of both international and domestic economic factors, including the eurozone's ongoing debt crisis, the United States' strategy of bringing manufacturing back home, China's strained land supplies and rising labour costs.

China approved the establishment of 13,677 foreign-funded companies in the first seven months, down 12.3 percent from a year earlier.

Shen said FDI into the real estate sector was effectively controlled, falling 9.3 percent in the January-July period compared with a year ago.

China has been striving to curb speculation in the real estate market in an effort to bring soaring home prices back to reasonable levels.

The FDI data came after an array of other economic indicators for July were released, including the inflation rate, bank lending, exports and industrial output, which signaled mounting downward pressure on the national economy.

China's economy expanded at its lowest pace in more than three years in the second quarter, rising 7.6 percent from a year earlier.


First Published: Thursday, August 16, 2012 - 15:53
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