Foreign direct investment in China fell in March, the first drop in over a year. The decline reflects challenges for overseas investors in an increasingly sophisticated and complicated environment.
China attracted 12.24 billion U.S. dollars in FDI last month, down 1.47 percent compared with the same time last year. FDI volume for the first quarter of 2014 came in at 31.5 billion U.S dollars, up 5.5 percent from last year. More than half of the FDI went into China’s service sector, up more than 20 percent from a year earlier.
Meanwhile, FDI in the manufacturing sector dropped 11.7 percent. Most Asian countries’ investments in China maintained steady growth, but investments from Japan and the European Union dropped significantly.
"Growth in investment in China’s central and western regions have surpassed growth in the eastern region by a great margin. China is still a very important investment destination for the world. Global companies are positive on China’s investment environment. This has not changed. It’s normal to see a slight drop in March, partially due to the currency rate. But it will not affect the FDI growth for the entire year. We are confident on the steady growth of FDI this year," said Ministry of Commerce spokesman Shen Danyang.
Non-financial outbound investment totalled 19.9 billion U.S. dollars in the first quarter of 2014, down 16.5 percent year on year. Investment in the Hong Kong region, the ASEAN countries and the EU have decreased 46.9, 8.1 and 7 percent respectively. Investment in the U.S on the other hand, increased 105 percent.
The drop in China’s total trade volume has caused much concern for the growth prospects of its economy. But Shen says that China trade will likely to pick up after May.
He said: "With slow recovery in developed economies and weak emerging economies, we remain cautious on trade for the entire year. But we also see many positive factors. Even though we saw some very disappointing trade figures in the first quarter and that may extend to April, we are confident that we can reach our growth target for the entire year."
Shen adds that the Ministry of Commerce is doing market research to come up with new policies to ensure steady growth in trade.
Source: CCTV
