China June FDI rises for 16th straight month

BEIJING (Reuters) - China's foreign direct investment (FDI) inflows rose at an annual pace of 2.2 per cent in the first six months and were up only modestly for June, indicating cautious investor optimism about the world's second-largest economy.

The Commerce Ministry said on Tuesday that China attracted US$63.3 billion (S$78.5 billion) in foreign direct investment in the first six months. June inflows rose 0.2 per cent from a year earlier to US$14.4 billion, its 16th straight month of gains.

FDI is an important gauge of the health of the external economy, to which China's vast factory sector is oriented, but it is a small contributor to overall capital flows compared with exports, which were worth about US$2 trillion in 2013.

FDI inflows in China have maintained steady growth every year since the country joined the World Trade Organization in 2001. Inflows reached a record high of US$118 billion in 2013.

Data from the Chinese trade ministry showed FDI from Southeast Asian nations posted the biggest fall in the first six months, down 19.2 per cent at US$3.4 billion.

FDI from the UK registered the sharpest increase, up a hefty 76 per cent to US$0.7 billion.

China's outbound direct investment from non-financial firms between January and June totalled US$43.3 billion, down 5 per cent from a year earlier.