ecns [expanded by feedex.net]: Foreign direct investment slides 6.7 pct

ecns [expanded by feedex.net]

ecns

Foreign direct investment slides 6.7 pct
http://www.ecns.cn/business/2014/06-17/119503.shtml
Jun 17th 2014, 08:21

2014-06-17 17:21 Web Editor: Si Huan


China's foreign direct investment dropped 6.7 percent from a year earlier to US$8.6 billion in May, the Ministry of Commerce said on Tuesday.


The contraction was unexpected after a rise of 3.4 percent in April.


In the first five months, China attracted US$48.9 billion in foreign direct investment, up 2.8 percent on an annual basis.


Investors from South Korea and the United Kingdom led the way. Investment from South Korea surged 87.9 percent while it jumped 62.2 percent from the UK during the January-May period.


Funds from Japan decreased 42.2 percent and that from the 28-member European Union fell 22.1 percent in the first five months. Direct investment from the US in China dropped 9.3 percent, while funds from the ASEAN countries declined 22.3 percent in the period.


Despite the overall decline, ministry spokesman Shen Danyang said China remained one of the best destinations for foreign investment due to its stable government, massive consumer market and growing number of industries opening to foreign participation.


Declining investments from countries like the US and some ASEAN members were a result of base effects as certain big projects occurred last year, Shen said.


"We do have space for further improvement and the Chinese government has been making continuous efforts on this," Shen said.


In a recent report by the European Union Chamber of Commerce in China, some European companies said they were less confident about China due to fiercer competition and higher labor costs.


As a sign of China's growing efforts to restructure the economy, foreign investment in the service sector gained 19.5 percent to US$27.5 billion in the first five months, making up 56.2 percent of the total. In comparison, the manufacturing sector drew US$17.4 billion, down 16.5 percent on an annual basis.


Meanwhile, China's outbound direct investment fell 10.2 percent to US$30.8 billion in the first five months. The decrease was due to the high comparative base last year when several huge projects were completed.





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