Sharp rise of FDI shows confidence
China's direct foreign investment grew by about 55 per cent in August, which indicated strong confidence by foreign investors in the Chinese economy despite the government's credit tightening moves.
The nation registered an actual foreign direct investment (FDI) of US$43.559 billion in the first eight months, up 18.77 per cent year-on-year, according to the Ministry of Commerce.
The contracted direct investment, an indicator of future trends, increased by 38.89 per cent to US$93.792 billion in the period.
The ministry said China approved 28,748 new foreign-invested ventures in the first eight months, up 11.73 per cent.
The ministry did not provide specific data for August alone.
Based on calculations using official information, actual FDI in August was US$5.156 billion, up 55.3 per cent from a year earlier.
The growth rate of actual FDI hit a record high this year,compared to 14.16 per cent of June and 15.5 per cent of May this year.
Analysts contributed the high rate to the small base in August last year, which was impacted by the aftermath of the SARS (severe acute respiratory syndrome) outbreak.
Foreign investment slipped by nearly 28 per cent last August from a year earlier to US$3.32 billion.
From July last year, the country experienced drops in the FDI growth rate for five consecutive months.
This July saw the growth rate hit nearly 46 per cent because of the small base last July.
The Chinese Government has predicted the actual FDI to China will roughly match or exceed the US$53.5 billion in 2003.
Analysts said many foreign investors added their investment to cash in on a new round of opening-up policies.
More capital will flow into fields such as banking, tourism, commerce, hospitals and education as China realizes many promises in line with its WTO agreements by December 11 this year.
In another development, catering industry sales increased by 19.6 per cent to 60.6 billion yuan (US$7.3 billion) in August, which makes total sales of 456.1 billion yuan (US$55.1 billion) in the first eight months.
The Ministry of Commerce had predicted the annual earnings of the catering industry will increase by 18 per cent to about 720 billion yuan (US$87 billion).