/ 15 December 2010

China says foreign investment up 38%

Foreign direct investment in China rose 38,17% year-on-year in November, the government said on Tuesday, despite efforts to control inflation and stem the flow of liquidity.

China attracted $9,7-billion in foreign investment last month, commerce ministry spokesperson Yao Jian told reporters.

Foreign investment had slowed sharply in August, rising just 1,4% year-on-year compared with an increase of 29,2% in July and 39,6% in June.

But in September it picked up again, increasing 6,1% year-on-year, while in October it rose 7,9% year-on-year.

Yao said foreign companies pumped R91,7-billion dollars into China in the first 11 months of the year, up 17,73% over the same period last year.

“We expect full year foreign direct investment to reach around $100-billion,” Yao said.

The data includes investment by overseas companies in industries such as manufacturing, real estate and agriculture but excludes money put into banks and other financial institutions.

Ever fearful of inflation’s historical potential to spark unrest, China’s central bank announced in October the country’s first interest rate hike in nearly three years.

Last Friday, the central bank ordered lenders for the sixth time this year to keep more money in reserve, as authorities struggle to stem the flow of liquidity into the economy, which is fanning inflation. — Sapa