China's foreign investment falls for 3rd month

[September 19, 2012]  BEIJING (AP) -- Foreign direct investment in China declined in August for a third straight month as the impact of economic weakness in Europe and the United States worsened, the government said Wednesday.

Foreign investment in factories, real estate and other assets declined 1.4 percent from a year earlier to $8.3 billion, the Ministry of Commerce said. That does not include investment in stocks and other financial assets.

The decline is a setback for the communist government's plans to encourage investment as a key part of its effort to reverse China's economic downturn. Authorities have imposed curbs on real estate investment to cool surging housing costs but are trying to encourage private companies to spend more in other areas.

Foreign investment so far this year is down 3.4 percent from the same period of 2011 at $75 billion, the ministry said.

Investment from the 27-nation European Union, which is China's biggest trading partner, declined 4.1 percent in the January-August period, the ministry said. FDI from the United States was down 2.8 percent.

Investment from Japan rose 16.2 percent from a year earlier, though that was a slowdown from 2011's 50 percent increase.

[Associated Press]

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