Foreign Direct Investment in China Up 23%

Attracted $10.03 billion in foreign investment last month

Despite an official campaign to stem liquidity and control inflation, foreign direct investment in China rose 23.4% in January from a year earlier, the government said on Feb. 17.

China attracted $10.03 billion in foreign investment last month, commerce ministry spokesman Yao Jian said.

The figures indicated that a revival in investment continued after growth slowed sharply in August and despite several moves by the government to slow the economy, including last week's third interest rate hike in four months.

The January figure compares to growth of 15.6% in December, when $14.03 billion in investment flowed into China.

Foreign direct investment hit a full-year record of $105.7 billion in 2010, the government said last month, highlighting growing foreign confidence in the economy despite Beijing's dampening measures.

Investment by overseas companies last year rose 17.4% year-on-year, with more than a fifth of the money flowing into the red-hot property sector, Yao had said last month.

Analyst say strong growth in the world's second-largest economy and expectations for a stronger currency have attracted a growing number of foreign investors to China, hoping to get a better return on their money.

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

Figures released on Feb. 15 showed January inflation remained high at 4.9%, despite adjustments to the consumer price index that reduced the weighting of soaring food costs.

China's foreign direct investment data include investment by overseas companies in industries such as manufacturing, real estate, services and agriculture but exclude money put into banks and other financial institutions.

Copyright Agence France-Presse, 2011

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