Foreign direct investment into China rises in Jan-May: Government

BEIJING (AFP) - Foreign direct investment (FDI) into China rose during the first five months of this year, the government announced on Tuesday, paced by strong increases from the European Union and United States.

Incoming FDI, which excludes financial sectors, rose 1.0 percent to US$47.6 billion (S$59.5 billion) from January through May, the Commerce Ministry announced. It was also up 0.3 percent in May to US$9.26 billion from the same month last year, the ministry said.

"Investment from the EU and the US continued to increase rather rapidly" in the first five months, ministry spokesman Shen Danyang told reporters.

EU investment into the world's second-largest economy rose 24.1 percent US$3.45 billion over that period. Investment from the United States increased 22.6 percent to US$1.58 billion.

The rise in EU investments come as Brussels and Beijing are involved in a series of disputes covering products ranging from steel pipes to solar panels that have sparked fears of a trade war between the economic giants.

China said earlier this month it will deal "appropriately" with the EU's decision to challenge it at the World Trade Organisation after Beijing slapped duties on some steel products.

China has launched an anti-dumping probe into imports of EU wine and chemicals while the EU has slapped tariffs on Chinese solar panels and threatened an investigation into the country's key telecom equipment firms.

The vast majority of the FDI investment into China comes from a group of 10 Asian countries and regions including Hong Kong, Taiwan, Japan and Singapore.

Investment inflows from those locales gained 0.57 percent on-year to US$40.9 billion over the five-month period.

Hong Kong accounted for the majority of that figure at US$30.5 billion.

"The FDI situation has been relatively stable and good," Mr Shen said, calling it an endorsement of "China's competitiveness and the acknowledgement of China's investment environment by global investors."

FDI into China fell in 2012 for the first time in three years owing to global economic uncertainties led by Europe's debt crisis, an economic slowdown at home and regional political tensions.

China's economy grew at its slowest pace in 13 years in 2012 as gross domestic product expanded 7.8 percent in the face of weakness at home and in key overseas markets.

China's overseas investment in non-financial sectors in January-May, meanwhile, rose 20 percent year-on-year to US$34.3 billion, the commerce ministry said.

China's investment into Hong Kong, the Association of Southeast Asian Nations, the European Union, Australia, the US, Russia and Japan totalled US$26.9 billion, up 16 percent on-year and accounting for 78 percent of the total in the first 5 months, according to the ministry.

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