FDI dip a 'normal fluctuation'
By Yu Liang (China Daily)
Updated: 2006-06-16 14:36
Foreign direct investment (FDI) to China was US$4.51 billion last month, down
7.8 per cent year-on-year. But Ministry of Commerce spokesperson Chong Quan
yesterday described the drop as a "normal fluctuation."
From January to
May, however, FDI totalled US$22.99 billion, a slight increase of 2.7 per cent
over a year ago.
The Chinese Government approved 15,659 foreign-invested
enterprises from January to May, down by 4.7 per cent year-on-year.
Kong, the British Virgin Islands and Japan were China's major FDI sources. The
ministry did not release the data on contracted FDI, which are deals signed but
not yet executed.
Chong said China had seen a steady growth in FDI flows
in past years, including many mergers and acquisitions (M&A), which are a
common practice worldwide.
In January, the ministry estimated that FDI to
the country dipped 0.5 per cent year-on-year to US$60.33 billion in 2005.
But the figure was later revised to US$72.4 billion, a growth of nearly
20 per cent on the previous year when investment to the financial sector,
including banking, insurance and securities, was calculated.
Vice-Minister of Commerce Ma Xiuhong said in an earlier interview that
the financial sector, which previously attracted less than US$2 billion a year,
has become a major destination for FDI.
The increase of investment flows
to the financial sector has contributed to China's opening up its market to
foreign investors in line with its commitments to the World Trade
Experts predicted that the financial and service sectors
would continue to attract growing investment this year.
director of Foreign Economic Studies at the State Council Development Research
Centre, said service sector investment growth would be faster than growth in the
manufacturing sector as China fully opens its services market this
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