January foreign direct investment in China rises 16%: Govt

BEIJING (AFP) - Foreign direct investment (FDI) into China increased 16.1 per cent in January, the government said on Tuesday, with cash infusions from Asian economies and the United States showing the steepest rises.

FDI, which excludes investment in financial sectors, totalled US$10.8 billion (S$13.6 billion) in January, the commerce ministry said in a statement.

Separately, Chinese overseas investment rose 47.2 per cent to US$7.23 billion in January, the ministry said, including a huge increase to Japan, a country with which China is embroiled in a bitter territorial dispute.

Investment to Japan soared 500 per cent in January from the same month in 2013, with that to Russia surging 282 per cent, the ministry said.

It did not give totals or explanations, but the Japanese figure will have had a low comparative base as tensions between the two countries were already strained last year by the row over uninhabited islands in the East China Sea claimed by both but controlled by Japan.

By far the greatest proportion of investment into China comes from a group of 10 Asian countries and regions including Hong Kong, Taiwan, Japan, Thailand and Singapore.

FDI from those economies rose 22.2 per cent to US$9.55 billion, the ministry said.

US investors put US$369 million into the country in January, up 34.9 per cent.

"Investment from the 10 Asian countries and regions and the US maintained steady and fast growth," ministry spokesman Shen Danyang said in the statement.

Shen later told reporters: "We expect FDI to maintain a good growth momentum this year." January's double-digit increase showed that investors were still confident in China's economic outlook, he added. Growth was mainly driven by service sector investments, he said.

Investment from the European Union, however, declined sharply, decreasing 41.3 per cent to US$482 million.

Of China's outbound investment, 63.3 percent or $4.58 billion went to Hong Kong, the Association of Southeast Asian Nations (Asean), the EU, Australia, the US, Russia and Japan.

Investment to Hong Kong and the US gained 53.3 per cent and 14 per cent, respectively.

But investment to the EU declined 37.8 per cent, while that to Asean was down 32 per cent. Investment to Australia dropped 24.2 per cent.

The figures come after foreign investment into China rebounded in 2013 to US$117.59 billion as confidence in the country's growth potential picked up. It had declined the year before.

Investment by China overseas also rose last year, hitting US$90.17 billion, and officials said it could overtake the incoming total as early as this year.

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