Foreign Direct Investment In China Falls Again

Fiercer competition among developing countries for foreign capital is part of reason

Foreign direct investment in China fell 9.5% in March, for the sixth straight monthly fall, but there were some signs the worst could be over, the government said on April 15.

Foreign firms invested $8.4 billion in the country last month, a decline of 9.5% year-on-year. The investment in March was the highest since June last year, when foreign firms pumped in $9.6 billion. The ministry had earlier said it was the highest since October.

The drop in March also narrowed from year-on-year falls in January and February, which saw declines of 32.7% and 15.8 % respectively.

"The decline in actual foreign investment is showing a trend of narrowing," the commerce ministry said.

The March fall saw foreign direct investment in China plunge 20.6% in the first quarter from the same period last year to $21.8 billion.

Factors affecting China's attractiveness this year include policies in some nations to encourage firms to invest back at home amid the global economic crisis, ministry spokesman Yao Jian said. Fiercer competition among developing countries for foreign capital was another reason, he said.

Copyright Agence France-Presse, 2009

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