Foreign Direct Investment in China Nears $8.5 Billion in April

Robust growth and expectations for a stronger currency attract growing number of overseas investors, analysts say.

The value of foreign direct investment in China rose 15.2% in April year-on-year to $8.46 billion but fell from the previous month, the commerce ministry said Tuesday.

April FDI was down from $12.52 billion in March, when it rose 32.9 percent on-year, the ministry said in a statement.

Ministry spokesman Yao Jian did not explain why FDI had dropped in April from the previous month.

The world's second-largest economy attracted $38.8 billion in FDI during the January-April period, up 26.03% on-year, it said.

Analysts say robust growth in China and expectations for a stronger currency have attracted a growing number of overseas investors hoping for a better return on their money as the United States and Europe remain in the doldrums.

But the government, alarmed by soaring food and real estate prices, has been trying to reduce the volume of money flowing into the economy as inflation continues to soar.

China's economy grew 9.7% year-on-year in the first quarter, beating a Dow Jones Newswires estimate of 9.5%. It was slightly lower than the 9.8% growth rate posted in the final quarter of 2010.

The ministry also said Chinese companies' overseas investment in non-financial sectors reached $13.4 billion in the first four months of the year, up 17.5% from a year earlier.

Yao said China would continue to promote imports this year with the aim of balancing trade and restructuring the economy.

Beijing is looking to increase imports to help reduce its massive foreign exchange reserves -- the world's largest at $3.0447 trillion at the end of March -- which are fanning inflationary pressure.

Copyright Agence France-Presse, 2011

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