Foreign direct investment into China down 6.7% in May

Iron ore being unloaded on a port in Qingdao, east China's Shandong province, in May 2014. -- PHOTO: AFP
Iron ore being unloaded on a port in Qingdao, east China's Shandong province, in May 2014. -- PHOTO: AFP

BEIJING (AFP) - Foreign direct investment (FDI) into China fell 6.7 per cent year-on-year to US$8.6 billion in May, the government said Tuesday.

For the first five months of the year FDI - which excludes investment in financial sectors - was up 1.6 per cent at US$48.91 billion, the commerce ministry said in a statement.

In April, FDI was US$8.7 billion.

"Investment from major countries and regions into China generally maintained a stable growth momentum," the ministry said.

China's top investors in the January-May period were Hong Kong, Taiwan, Singapore, South Korea and Japan, the ministry said.

Investment from South Korea and Britain jumped 87.9 per cent and 62.2 per cent respectively in the five months, while that from Japan and the United States dropped 42.2 per cent and 9.3 per cent respectively, the ministry said, without providing values.

Investment from the European Union dropped 22.1 per cent to US$2.58 billion, with that from Association of South-East Asian Nations (Asea) cnountries falling 22.3 per cent to US$2.54 billion.

Foreign investment into China rebounded in 2013 to US$117.59 billion, though slowing growth in the world's second-largest economy could suppress inflows this year.

China's economy expanded 7.7 per cent in 2013, the same as 2012 - the worst pace since 7.6 per cent in 1999. China's official growth target for this year is 7.5 per cent, also the same as last year's.

It grew 7.4 per cent in the first three months of 2014, the worst pace since a similar 7.4 percent expansion in the third quarter of 2012.

The commerce ministry also announced that China's overseas investment in non-financial sectors in the first five months fell 10.2 percent year-on-year to US$30.81 billion.

Investment to the United States rose 144 per cent year-on-year to US$2.03 billion, and that to the Asean countries increased 4.2 per cent to US$1.9 billion, it said.

China's investments into Hong Kong, the EU and Australia fell 32.6 per cent, 9.2 per cent and 3.2 per cent respectively, it said.

But investment into Russia and Japan leaped by 105.7 per cent and 141.9 per cent "due to low comparison bases last year", it said.

Beijing has encouraged Chinese companies to "go out" to seal supplies of crucial resources as well as make overseas acquisitions to gain market access and international experience.

China's total outstanding overseas investment in non-financial sectors as of the end of May stood at US$556.5 billion, the ministry said.

Chinese outbound investment increased last year, hitting US$90.17 billion, and officials said it could overtake FDI this year.