China’s FDI has picked up again, up 31.97% from November 2008, according to Yao Jian, spokesman for the Ministry of Commerce. This marks the fourth month in a row that FDI growth has been positive, reaching $7.02 billion. Actual FDI between January and November totaled $77.9 billion, a drop of 9.86% from last year. According to Yao Jian, figures in November were the highest in 16 months, compared with a 5.7% increase in October. The number of newly approved FIEs also grew in November by about 10%.
In part, these promising numbers resulted from low figures in November 2008, when FDI fell by 36% year-on-year. The increase was also largely thanks to investment from ASEAN members, with numbers up by 60% this year, while funds from the US and the EU dropped by 38%. China’s export market also showed continued signs of recovery; though they dropped by 1.2%, the decline was the lowest since they collapsed one year ago. In particular, areas in coastal provinces such as Jiangsu, Guangdong, and Liaoning, as well as the inland city of Chongqing, saw great increases in investment. The manufacturing sector has also emerged strongly, accounting for over 50% of the total share.
In reaction to the uncertain economy, foreign companies had cut investment and cut back on payrolls, and many re-focused on the fast-growing domestic market. However, as the trend over the last few months has been stable, China’s FDI increase can be expected to continue in the end of 2009 and into 2010. According to a study by the US Chamber of Commerce, 90% of investors interviewed showed positive attitudes toward the Chinese economy, and 65% planned to increase inflows in 2010.
