FDI registers five-month slide
( 2003-12-16 00:45) (China Daily)
China's foreign direct investment, or FDI, fell 38.97 per cent to US$3.59 billion in November, according to the Ministry of Commerce.
But experts believed the annual FDI figure will not see a decline, although single-month FDI figures have experienced consecutive drops since July this year, with November seeing the largest drop.
FDI in the first 11 months was US$47.2 billion, up a mere 0.2 per cent from a year earlier.
But contractual foreign investment, an indicator of future trends, was US$11.8 billion, soaring 68.6 per cent from a year earlier, the ministry said.
Total contractual FDI in the first 11 months was US$100.5 billion, up 37.1 per cent.
Jin Bosheng, director of the Foreign Investment Research Department of the Chinese Academy of International Trade and Economic Co-operation, said he is optimistic the FDI will not be lower than that of last year.
However, the government has lowered its expectations on FDI this year to US$50 billion, according to Fu Ziying, a top ministry official.
China attracted US$52.7 billion worth of FDI last year and overtook the United States as the world's largest recipient of foreign investment.
Ministry officials have said in September that figure would rise to about US$57 billion this year.
Jin said he is still confident that China's FDI will resume its robust growth.
Many agreed the slowdown was due to the outbreak of severe acute respiratory syndrome (SARS) earlier this year.
"The SARS impact will not last long, since China's economy and foreign trade can revive so quickly,'' Jin said.
Jin said that FDI is bound to boom within the early part of next year, given the dynamic growth in contractual FDI.
Vice-Minister of Commerce Liao Xiaoqi said last month that China's growth will remain robust, despite the fact that its FDI experienced a two-digit decrease for four straight months from July to October.
"There is no reason China's FDI will suffer a big drop in the future, since China offers so many opportunities,'' said Liao.
Jin agreed with Liao, saying China will continue to be a hot destination for FDI since no drastic changes have occurred in its favourable macro-situation.
China is also sticking to its stable political and secure investment environment, whereas many other countries are troubled by fears of terrorism and other matters, Jin said.
China's Hong Kong Special Administrative Region, the British Virgin Islands, Japan, the Republic of Korea (ROK) and the United States are the five biggest contributors to China's FDI.
In the first 11 months of this year, US investment in China fell by more than 24 per cent year-on-year, to US$3.7 billion, though contracted funds were up 17.8 per cent, the ministry said.
Investment from the European Union rose 10.3 per cent in the first 11 months, while that from 10 Asian nations including Japan and the ROK was up 4.6 per cent.
A total of 460,812 foreign-funded companies have been approved in China until now, with 36,616 new this year.
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