Foreign investment in 2012 declines in China

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IANS | 18 Jan, 2013
In a first yearly drop in three years, foreign direct investment in China fell 3.7 percent from a year earlier to $111.7 billion in 2012, the country's Ministry of Commerce has revealed.

In December alone, foreign investors channelled $11.7 billion funds into China, down 4.5 percent, which was a seventh consecutive monthly decline.

Attributing the 3.7 percent decline in foreign funds partly to less investment in manufacturing, Ministry's spokesperson Shen Danyang said some investors have moved out of China for even cheaper labour costs and less stringent production criteria, Shanghai Daily reported.

But "such phenomena were within a normal range, not becoming a large-scale outflow", Shen said.

"China welcomes foreign investors, and will continue to improve the investment environment to attract more foreign investment," Shen said.

Li Maoyu, an analyst at Changjiang Securities Co, said gloomy global economic conditions, rising labour costs in China and the nation's more strict investment criteria were among the reasons for dwindling foreign investment.

"China is just one of the many countries suffering less foreign investment in a bad global economic climate," Li said. "It remains one of the top choices for global businesses."