BEIJING, Feb 20: China’s foreign direct investment inflows fell 7.3 percent in January from a year earlier, extending 2012’s series of consecutive year-on-year declines that highlights still sluggish global economic conditions.
The Commerce Ministry said on Wednesday that China drew $9.27 billion in foreign direct investment in January, down from December’s $11.7 billion. Investment inflows from key Asian economies and the U.S. Were down in the latest period.
FDI is an important gauge of the external economy to which China’s vast factory sector is oriented, though it is a small contributor to China’s overall capital inflows compared with exports, which were worth about $2 trillion in 2012.
The FDI data followed stronger-than-expected trade figures in January, which pointed to a solid recovery in domestic and external demand that signals the world’s second-largest economy is gaining momentum after growth in 2012 eased to a 13-year low – albeit at a 7.8 percent clip that is the envy of the world’s major economies.
A report earlier on Wednesday from ratings agency, Moody’s, said China’s economy was on track to deliver growth of 7.5-8.5 percent in 2013, with relatively easy monetary conditions and targeted fiscal spending likely to sustain the recovery.
‘The favorable growth outlook is supported by policy easing and credit extension, particularly by the non-banking sectors, and should continue in 2014,’ Moody’s said.
China attracted a total of $111.7 billion in FDI in 2012, just shy of 2011’s record $116 billion and marking the first annual fall in three years.
Beijing has said it wants to bring in $120 billion worth
Of FDI each year between 2012 and 2015.
China joined the World Trade Organisation in November 2001 and FDI inflows have soared since. OECD data shows China rivals the United States as the world’s top FDI destination.
Commerce ministry data showed investment inflows from the European Union rose 81.8 percent in January from year ago to $820 million, while investment by U.S. Firms fell 20.0 percent during the same period to $270 million.
FDI from 10 top Asian economies, including Hong Kong, Japan and Singapore, fell 9.0 percent year on year in January, to $7.8 billion the ministry said.
Service sector inflows last month were $4.0 billion, down 9.8 percent on a year ago.
Manufacturing sector inflows totaled $4.43 billion in January, down 5.8 percent versus a year earlier.
China’s outbound direct investment from non-financial firms in January totaled $4.9 billion, up 12.3 percent from a year ago, the commerce ministry said. (agencies)
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