Beijing: Foreign direct investment (FDI) in China fell in November for a sixth straight month, the government said with the outlook expected to remain weak in 2013 due to global uncertainties. Overseas companies invested $8.29 billion in factories and other projects in China last month, down 5.4 per cent from a year ago, commerce ministry spokesman Shen Danyang said at a regular news conference.
The drop added to a long downward trend that began in November 2011. FDI has declined every month since then except for May, when it eked out a marginal 0.05 per cent gain. For the first 11 months of the year, FDI was down 3.6 per cent year on year at $100.02 billion, Shen said.
The government has blamed the slump on the slowdown in global economic growth, the prolonged European debt crisis, and rising costs and weak demand at home. "In 2013, the size of China's FDI will remain stable and will not fall sharply," Shen said.
"But the general environment will remain severe due to external uncertainties." China, the world's second-largest economy, was once a magnet for foreign investment, but the weak global economy as well as the Asian giant's own woes have curbed enthusiasm. The Chinese economy has slowed for seven consecutive quarters, expanding 7.4 per cent in the three months ended September 30, its worst performance since the first quarter of 2009.
Economic indicators for the current fourth quarter including manufacturing activity, industrial production and retail sales have shown improvement, however, leading to optimism that economic growth could be set to improve. Investment from countries in the debt-laden European Union decreased 2.9 per cent on year in the January-November period to $5.81 billion, according to the ministry's data.
Bucking the downward trend, however, was investment from the United States, which increased 6.3 per cent to $2.91 billion in the same period. In contrast, China's investment abroad has surged sharply this year after slowing in 2011 owing to a weak global economic recovery and financial turmoil in Europe and the United States.
Outbound direct investment in non-financial sectors in the first 11 months of 2012 totalled $62.5 billion, up 25 per cent from the same period last year, Shen said. In 2011, the figure stood at $60.1 billion, up just 1.8 per cent year on year, previous official data showed. China has set goals to increase overseas direct investment at an average annual rate of 17 per cent through 2015 to $150 billion by then.