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China's FDI inflows falter again in July, ODI soars

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BEIJING, Aug. 18 (Xinhua) -- Foreign direct investment (FDI) into the Chinese mainland fell sharply again in July, slumping 16.95 percent from a year earlier to 7.81 billion U.S. dollars, the Ministry of Commerce said on Monday.

The sharp decline was in contrast with a minor 0.2-percent increase seen in June, according to the ministry.

For the first seven months, the FDI, which excludes investment in the financial sector, stood at 71.14 billion U.S. dollars, down 0.35 percent from the same period last year.

With China speeding up economic restructuring, it's normal for us to have some fluctuations in FDI figures," said Shen Danyang, spokesman of the MOC, "but such fluctuations are not evidence for changing trends."

According to the MOC, foreign investors set up 13,249 new companies in the first seven months of 2014, overall up 1.6 percent from last year, compared with a 3.2-percent increase in the first half of the year.

Shen rejected speculation the decline in FDI was related with China's ongoing anti-monopoly investigations into foreign-funded companies.

"Groundless speculation is completely unnecessary," he said.

According to the MOC, China's FDI in the January-July period mainly flowed into the service sector, which attracted 39.72 billion U.S. dollars of overseas investment, or 55.8 percent of the total during the period.

The FDI into the manufacturing sector in the January-July period fell 14.26 percent to 25.2 billion U.S. dollars, or 35.4 percent of the total.

According to the MOC, the top overseas investors were Hong Kong, Taiwan, Singapore, Republic of Korea (ROK), Japan, the United States, Germany, France and the Netherlands. Collectively, they contributed 93.9 percent of the total.

Investment from the United Kingdom and the ROK remained strong in the first seven months, up by 61.2 percent and 34.6 percent, respectively.

However, Japanese investors cut their investment by 45.4 percent from previous year to 2.83 billion U.S. dollars during the period, while investment by the U.S and European Union dropped 17.4 percent and 17.5 percent, respectively.

On the other hand, the outbound direct investment (ODI) by Chinese non-financial companies soared 84.9 percent from previous year to 9.21 billion U.S. dollars in July, compared with a year-on-year decline of 5 percent in the January-June period.

The July ODI figure marked the first monthly growth since February this year, according to Shen Danyang, spokesman of the MOC.

The sharp increase in ODI contributed to the 4-percent annual growth for the first seven months, during which Chinese investors made 52.55 billion U.S. dollars, or 322.74 billion yuan, of investment in 149 countries or regions, according to the MOC.

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