China Jan-July foreign direct investment rises 7.9%

China attracted 471 billion Chinese yuan (S$103.28 billion) in foreign direct investment (FDI) in the first seven months of 2015.
China attracted 471 billion Chinese yuan (S$103.28 billion) in foreign direct investment (FDI) in the first seven months of 2015. PHOTO: REUTERS

BEIJING (REUTERS) - China attracted 471 billion Chinese yuan (S$103.28 billion) in foreign direct investment (FDI) in the first seven months of 2015, up 7.9 per cent from a year earlier, the Commerce Ministry said on Wednesday (Aug 19).

FDI inflows in July rose 5.2 per cent from a year earlier to 50.6 billion yuan, the ministry said in a regular briefing.

FDI is an important gauge of overseas investment interest in China, but it is a small contributor to overall capital flows compared with the giant export sector.

FDI inflows into China rose 1.7 per cent in 2014, the slackest pace since 2012, while the total was a record US$119.6 billion (S$167.66 billion). Outbound direct investment (ODI) surged 14.1 per cent to a new high of US$102.9 billion.

In July ODI by non-financial firms fell 18.6 per cent from a year earlier to US$7.5 billion, the ministry said.

ODI surged 20.8 per cent in the first seven months of the year compared with a year earlier to US$63.5 billion, it added.

The government has been encouraging firms to invest abroad to slow down the build-up of foreign exchange reserves and to help local firms become more competitive internationally.

Analysts expect outbound investment to soon match and then exceed weakening investment inflows, reflecting a cooling economy that seems to have played a part in the jump in outbound flows as businesses look for growth elsewhere.