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FDI figures reflect economy slowdown

2014-03-19 08:22 Shanghai Daily Web Editor: qindexing
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Foreign direct investment in China grew at a slower pace in February, a reflection of the economic slowdown in the world's second-largest economy.

Foreign investors channeled US$19.3 billion into the country in the first two months of this year, up 10.44 percent from a year earlier, the Ministry of Commerce said yesterday, the pace moderating from January's 16.11 percent jump.

The ministry did not provide a figure for February alone, aiming to eliminate the distortions caused by seasonal factors such as the Spring Festival holiday.

However, using published data, foreign direct investment can be calculated at US$8.6 billion in February, up 4.1 percent from a year earlier.

Ministry spokesman Shen Danyang said the FDI growth was evidence of foreign investors' continued confidence in China's economy.

"Despite the current murky international investment climate and the fact that we face various problems in our development, foreign investors are confident of China due to the country's continuous efforts to improve business conditions," Shen said.

"It is certain that the business climate for foreign investors will become better, which will in turn strengthen their confidence in the country," Shen added.

A survey by the American Chamber of Commerce in Shanghai showed that 67 percent of US companies in China reported increased revenue last year and 74 percent said their China operations were profitable.

In the first two months, foreign investment from the US climbed 43.26 percent from a year earlier to US$711 million. The group of 10 Asian countries and regions raised their investment by 11.58 percent to US$16.93 billion, with South Korea more than doubling its input. However, investment from the 28-member European Union fell 13.82 percent, although it still reached US$1.04 billion.

As a sign of China's efforts to restructure the economy, foreign investment flowing into the service sector gained 25.54 percent year on year to US$10.6 billion in the January-February period, accounting for 54.9 percent of the overall basket. In comparison, manufacturing drew US$7.01 billion, down 6.06 percent.

Meanwhile, China's outbound direct investment fell 37.2 percent year on year to US$11.5 billion in the first two months. The sharp decrease was mainly due to the high comparative base last year when China National Offshore Oil Corp completed its US$14.8 billion purchase of the Canadian firm Nexen Inc.

Excluding that project, it expanded 33.6 percent in the first two months, Shen said.

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