China FDI continues falling in March

Updated: 2012-04-17 15:46


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BEIJING - Foreign direct investment (FDI) flowing into China fell for a fifth straight month in March as companies curbed investment amid a global economic slowdown.

China FDI continues falling in March

The FDI dropped 6.1 percent year on year to $11.76 billion in March, following a 0.9-percent decline in February and a 0.3-percent fall in January, the Ministry of Commerce (MOC) announced Tuesday.

The country received $29.48 billion of FDI in the first three months, down 2.8 percent from a year earlier, MOC spokesman Shen Danyang said at a press conference here.

Shen said China's campaign to curb property prices and speculation also affected FDI inflows as the real estate sector attracted nearly one-fourth of the total FDI in recent years. However, he said the investment decline in the sector was in line with the government's macro-regulation policies. 

"As for the outlook for this year, we believe the situation will be quite grim. There is still no resolution to the European debt crisis and European companies' abilities to invest abroad have been reduced," he said, adding that competition has increased from other developing countries vying for foreign capital. 

Investment from the debt-ridden European Union plunged 31.2 percent in the first quarter from a year ago. However, that from the United States and Japan climbed by 10.1 percent and 13.2 percent, respectively, Shen said. 

China's economy expanded 8.1 percent in the first quarter from a year earlier, marking the slowest pace in almost three years. 

Rising labor costs, resource strains and fundraising problems might also dampen foreign companies' willingness to expand investment in China, Shen said. 

The nation approved the establishment of 5,379 foreign-invested companies in the first quarter, down 9.4 percent year on year. 

However, as investment into China drops, the country's outbound investment has surged. First quarter non-financial overseas direct investment rose 94.5 percent year on year to $16.55 billion.

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