Foreign direct investment (FDI) in China fell 1.52 percent
year-on-year in the first nine months of 2006. Total investments
slipped to US$42.59 billion, Ministry of Commerce spokesman Chong
Quan told a press briefing yesterday.
But compared with August's year-on-year fall of 8.49 percent,
the FDI in September rose 2.72 percent year-on-year to US$5.4
billion. This bucked a trend that started in May. Chong added that
3,794 foreign-funded firms were established last month, which was a
fall of 0.94 percent year-on-year. Over the nine-month period,
30,021 such firms had been set up -- a drop of 6.83 percent
year-on-year.
However, China continues to attract billions of dollars in FDI,
stated the World Investment Report 2006 released yesterday
by the UN Conference on Trade and Development. The report
identifies China as the third largest FDI recipient in 2005 with
its total of US$72.4 billion only being surpassed by the UK and the
US.
China's FDI inflow to the non-financial sector saw a slight fall
last year to US$60.3 billion, said the report. But FDI within the
financial sector rose to US$12 billion due to significant
investment in China's banking sector.
China's low labor costs had enabled the country to become a
global production base, the report said. But as domestic
capabilities increased China's FDI was likely to focus on higher,
value-added production requiring increasingly skilled labor.
The report stated China's outbound investment totaled US$63.64
billion by the end of June. Chong told the briefing that Africa
would be a major focus of China's outbound investment. The
country's investment in Africa had reached US$6.27 billion by the
end of September.
(China Daily October 17, 2006)