x Abu Dhabi, UAETuesday 25 July 2017

Foreign direct investment drops again in China

Foreign direct investment in China fell for the 12th time in 13 months, suggesting that the nation¿s economic-growth rebound has yet to attract a fresh influx of capital from abroad.

Foreign direct investment in China fell for the 12th time in 13 months, suggesting that the nation's economic-growth rebound has yet to attract a fresh influx of capital from abroad.

Investment dropped 5.4 per cent last month from a year earlier to US$8.29 billion (Dh30.45bn), the nation's commerce ministry said yesterday.

Foreign direct investment inflows in the first 11 months of the year fell 3.6 per cent to $100bn.

China will step up efforts to stabilise investment inflows next year and expand outflows, state media reported on Sunday after an annual economic-planning meeting in Beijing.

While factory output and retail sales have accelerated for the last three months, trade and lending trailed forecasts in November, restraining the pace of recovery.

"As China's economic growth may pick up slightly next year, so may FDI inflows," Ren Xianfang, a Beijing-based analyst with IHS Global Insight, said before the release.

"But don't expect any big increase, partly due to the government's efforts in curbing the property sector."

Foreign-investment inflows are likely to be stable next year and won't drop significantly, said Shen Danyang, a ministry spokesman.

China's economy will probably rebound further next year even as slow global growth may continue, Mr Shen said in Beijing.

Separately yesterday, China's new home prices climbed last month in 53 of the 70 cities the government tracks, data from the government statistics bureau showed today.

That was the most in 18 months.

The benchmark Shanghai Composite Index of stocks advanced 0.1 per cent yesterday, barely extending a rally that has pared its overall decline so far this year to 1.1 per cent.

Non-financial investment abroad rose 25 per cent in the first 11 months to $62.5bn, the ministry said yesterday, highlighting the nation's search for opportunities overseas amid slower growth at home.

Investment from Japan increased in November, with spending in the first 11 months gaining 11.3 per cent from last year, compared with a 10.9 per cent rise in the January-October period.

Investment had slowed from the first nine months as a dispute between the two nations over uninhabited islands intensified.

In the statement following the policy-setting national conference, there was no mention of seeking "relatively fast" growth, a phrase in place since 2006.

Leaders vowed to target "sustained and healthy development" as they maintained a "prudent" monetary policy and "proactive" fiscal stance, according to state news.

The People's Bank of China governor Zhou Xiaochuan said yesterday that the nation would continue to welcome long-term foreign investors and keep controls on short-term capital flows.

Caterpillar, the world's biggest construction and mining equipment maker, expected China's economic growth to increase next year as the government focused on urbanisation, said Doug Oberhelman, the chairman and chief executive.

* Bloomberg News