Copyright ChinaFotoPress, Getty Images
Industryweek 8602 China Economy

Foreign Direct Investment into China Speeds Up

April 16, 2015
China's overseas direct investments also leap in first quarter of 2015.

BEIJING - Foreign direct investment into China picked up in March, official figures showed Thursday, though outbound investment from the world's second-largest economy slowed sharply.

FDI rose 2.2% year-on-year last month to $12.4 billion, the commerce ministry said, an acceleration from February's 0.9% gain.

"Investment from major countries and regions in China was generally stable," the ministry said in a statement.

For the first three months of 2015, FDI gained 11.3% to $34.88 billion, the figures showed.

Overseas direct investment (ODI) increased 0.4% in March year-on-year to $8.39 billion, while for the first quarter it jumped 29.6% to $25.79 billion.

Both ODI and FDI exclude financial sectors.

China drew a total of $119.6 billion of FDI in 2014, while ODI surged to $102.9 billion, passing the $100 billion mark for the first time as Chinese companies seek opportunities abroad with economic growth slowing at home.

China's economy expanded 7.4% last year, the slowest since 1990, as authorities manage a makeover of the country's growth model they hope will place consumer demand at center stage as opposed to big ticket investment projects.

The government said Wednesday the slowdown continued into this year as the economy expanded 7% in January-March, the worst quarterly result for six years.

The three-month increase in FDI was driven by a 30.5% year-on-year increase in investment from the European Union to $2.02 billion.

Investment from Britain and France each rose to $370 million, for gains of 40% and 258.7% respectively.

Investment from Saudi Arabia surged nearly 800% to $240 million, the ministry said, without giving an explanation.

Investment from Japan, with which China is in a bitter dispute over territory and wartime history, fell 12.3% to $1.06 billion, the figures showed.

FDI from the United States dropped 40.4% to $620 million, while that from the ASEAN group of Southeast Asian countries fell 31.2% to $1.35 billion.

China's appeal as an investment destination has been declining in recent years owing to rising labor and land costs and competition from Southeast Asian countries such as Vietnam. 

Foreign investors have also complained of issues such as China's chronic air pollution as well as official campaigns and investigations into their business practices.

Chinese first-quarter investment to the EU surged more than eightfold to $3.54 billion, the ministry said, attributing the gain mainly to a $2.89 billion investment by state-owned oil giant China National Petroleum Corporation in the Netherlands, which was included in the February figures announced last month.

It said Chinese investment to ASEAN, Hong Kong, the U.S. and Russia all gained, increasing 51.4%, 44.4%, 37.4% and 14.3%, respectively. The ministry did not provide totals.

Investment to Australia fell 66.3%, while that to Japan declined 16.7%, it said.

China has been actively acquiring foreign assets, particularly energy and resources, to power its economy, with firms encouraged to make overseas acquisitions to gain market access and international experience.

Copyright Agence France-Presse, 2015

Popular Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!