|
 Thursday's data showed inbound FDI up 11.3 percent to $34.88 billion
for the first quarter.
The FDI news follows a series of disappointing data releases,
highlighting flagging domestic fixed asset investment, including in
property, and slowing industrial activity.
Foreign investment projects take time to conceive and implement,
making FDI a lagging indicator of general confidence, but they have
remained strong in recent months nevertheless.
In contrast, March trade data released on Monday was extremely weak,
with exports falling 15 percent on the year, the worst performance
for March since 2009, in the depths of the financial crisis.
Some analysts have posited a continued seasonal effect from this
year's very late Lunar New Year holiday, which fell on February
19th, making it the first in late February since 2007. Chinese
economic activity usually recedes during the holiday as factories
shut down and workers travel back to their home towns and villages.
Sectorally, Q1 FDI in services rose 24.1 percent year on year to
$21.59 billion, while FDI in manufacturing fell 3.6 percent to
$11.22 billion.
Investment from European nations posted large year-on-year gains in
the first quarter of the year, with French and British investment up
40 percent and 259 percent respectively. In aggregate, European
Union countries invested $2.02 billion, up 30.5 percent year on
year.
Exceptionally strong growth in FDI inflows in the first two months
of the year, including a nearly 874-percent jump for Saudi Arabia
and a 367-percent gain for France, were due to one-off deals,
commerce ministry spokesman Shen Danyang said in March.
Investment from the U.S. fell 40 percent on the year to $620
million, while ASEAN countries invested $1.35 billion, down 31.2
percent on the year.
While the strengthening dollar may have played a role by distorting
year-on-year comparisons in dollar terms, the large declines in
investment from two of China's major regional trading partners could
be seen as a warning sign - particularly in the context of other
poor data.
[to top of second column] |
Inbound FDI in China rose just 1.7 percent in 2014, the slackest
pace since 2012. That weak performance accentuated a cooling economy
which is spurring more Chinese firms to plow money into overseas
assets - a trend that could soon overtake inbound investment.
Last year, China drew a record $119.6 billion of FDI, while outbound
investment rose 14.1 percent to a new high of $102.9 billion.
The government has been encouraging Chinese firms to invest abroad
to make them more competitive internationally, utilize surplus
capacity, and help slow the rapid build-up of foreign exchange
reserves.
Outbound investment for the first three months of the year combined
rose 29.6 percent from the same period in 2014 to $25.79 billion.
The government has been encouraging Chinese firms to invest abroad
to make them more competitive internationally, utilize surplus
capacity, and help slow the rapid build-up of foreign exchange
reserves.
(Reporting by Judy Hua, Nathaniel Taplin and the Shanghai newsroom;
Editing by Eric Meijer)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
