China 2012 FDI inflows drop 3.45%

Nov 20 2012, 14:37 IST
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China's foreign direct investment inflows fell 3.45% in the first 10 months of 2012 from a year ago.  (Reuters) China's foreign direct investment inflows fell 3.45% in the first 10 months of 2012 from a year ago. (Reuters)
SummaryChina's foreign direct investment inflows fell 3.45% in the first 10 months of 2012 from a year ago.

China's foreign direct investment inflows fell 3.45 percent in the first 10 months of 2012 from a year ago, extending the longest run of decline in three years as uncertainty about the global economic outlook clouds corporate spending plans.

The Commerce Ministry said on Tuesday that China drew $91.7 billion in foreign direct investment between January and October, with October-only inflows down 0.24 percent on year ago at $8.3 billion.

Despite the slowing rate of inflow, China remains firmly on course to secure more than $100 billion of FDI for the third successive year, according to data from the United Nations Conference on Trade and Development, which collates FDI statistics

globally.

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 $1.9 trillion in 2011.

The FDI figure follows a raft of other economic indicators for October, ranging from exports to factory output and investment, that pointed to a recovery in the world's second-largest economy gaining pace.

Investment from the European Union dropped 5.0 percent year-on-year in the Jan- October period, the data showed, while inflows from the United States rose 5.3 percent during the same period.

Meanwhile, FDI from the top 10 Asian economies, including Hong Kong, Japan and Singapore, fell 4.7 percent to $78.0 billion in the first 10 months.

Services sector inflows in the first 10 months of the year were $43.7 billion, down 1.8 percent on a year ago. Within that sector, real estate inflows were down 6.1 percent. Excluding real estate, services inflows were up 2.1 percent year-on-year. Manufacturing sector inflows meanwhile stood at $40.4 billion between January and October, down 7.3 percent versus the same period in 2011.

China drew $116 billion in foreign direct investment last year, a record according to the Commerce Ministry which aims to attract an average of $120 billion in each of the four years from 2012 to 2015.

China's outbound direct investment from non-financial firms in the first 10 months totalled $58.2 billion, up 25.8 percent year-on-year, the Ministry said.

Despite shrinking FDI inflows, China's exports perked up more strongly than expected in October, with the trade surplus swelling to record high in 45 months.

To shield the economy from external uncertainties, Beijing has unveiled a slew of measures to

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