UPDATE 1-China 2011 FDI stutters to record $116 bln

Tue Jan 17, 2012 10:15pm EST

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* FDI of $116 bln in 2011 at record
    * But December inflows down 12.7 pct on year ago
    * FDI from US and Europe both fell in 2011
    * China's outbound investments rose 1.8 pct in 2011


    By Zhou Xin and Nick Edwards	
    BEIJING, Jan 18 (Reuters) - Foreign direct investment
in China rose 9.7 percent in 2011 to a record $116 billion,
though December's inflow of $12.24 billion was down 12.7
percent versus year-ago levels, the Commerce Ministry
said on Wednesday.	
    It was the second consecutive month that China's
non-financial foreign direct investment (FDI) fell versus
year-ago levels, signalling that once unabated capital flow into
the world's second-biggest economy is stuttering.	
    FDI inflows from the United States sank 26.1 percent in 2011
to $3.0 billion, while those from the European Union fell a more
modest 3.65 percent to $6.3 billion, the Commerce Ministry said.	
    China's non-financial outbound direct investments,
meanwhile, rose 1.8 percent in 2011 to $60.1 billion, taking the
outstanding value of China's outbound investments to $322
billion by the end of the year.	
    In 2011 alone, China invested in 1,392 overseas projects in
132 countries.	
    "China's investments in Europe and Africa were particularly
strong in 2011," Shen Danyang, the spokesman of Ministry of
Commerce, told a regular news conference.	
    That outward investment strength comes as inward investments
cooled sharply in the closing months of 2011 -- a distinct
difference to the situation in 2010.	
    FDI inflow in December 2010 grew 15.6 percent at an annual
rate to $14 billion, a record for any single month, and helped
push overall flows for 2010 up 17 percent to $105.7 billion.	
    The deceleration from that high level might well have been
expected in December 2011, but it came after China reported a 
9.8 percent year-on-year decline in November. That was the first
fall in 28 months.	
    Shen said general global economic weakness had restrained
both inward and outward investments in 2011, but added that
China should report "relatively fast" growth in both areas in
2012.	
    The Commerce Ministry said earlier this month it aimed to
attract an average of $120 billion FDI in each of the next four
years. 	
    It also unveiled new rules to encourage foreign investment
in strategic emerging industries, particularly those that bring
new technology and know-how to China. 	
    Investment inflows, which surged in the years after China
joined the World Trade Organisation in 2001, have recovered
strongly after being hit hard by the global economic slowdown in
2008/09.
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